Textbook: Banks and Simple Interest | Mathematics Class 6 (Maharashtra Board) PDF Download

 Page 1


73
 What does the picture above show? Find out about the nature of work done in this 
office. Make a note of your observations.
A Bank
 A bank is a government recognized organisation that carries out transactions of money.  
It is a financial organisation. Finance relates to money.
 We need to be prudent in spending 
the money we earn. We save money for 
use in the future. Our savings are meant 
to meet expenses on education, building 
a house, medical treatment, on our 
occupation such as for using improved 
14 Banks and Simple Interest
methods of agriculture, etc. Small savings 
made regularly accumulate over a period 
to become a large amount and prove 
useful in the future. An amount kept in a 
bank remains safe and also grows over the 
years.
Let’s learn.
Let’s recall.
Page 2


73
 What does the picture above show? Find out about the nature of work done in this 
office. Make a note of your observations.
A Bank
 A bank is a government recognized organisation that carries out transactions of money.  
It is a financial organisation. Finance relates to money.
 We need to be prudent in spending 
the money we earn. We save money for 
use in the future. Our savings are meant 
to meet expenses on education, building 
a house, medical treatment, on our 
occupation such as for using improved 
14 Banks and Simple Interest
methods of agriculture, etc. Small savings 
made regularly accumulate over a period 
to become a large amount and prove 
useful in the future. An amount kept in a 
bank remains safe and also grows over the 
years.
Let’s learn.
Let’s recall.
74
Financial Transactions
 
?? In the above picture, who are the people shown to be using bank services?
?? 	 What does the symbol on the bag in the centre stand for?
?? 	 What do the arrows in the above picture tell you?
Project Work
?? 	 Teachers should organise a visit to a bank. Encourage the children 
to obtain some preliminary information about banks. Help them 
to fill some bank forms and slips for withdrawals and deposits.
?? 	 If there is no bank nearby, teachers could obtain specimen forms 
and get the children to fill them in class.
?? 	 Give a demonstration of banking transactions by setting up a 
mock bank in the school.
?? 	 Invite participation of parents who work in banks or other bank 
employees to give the children more detailed information about 
banking. 
Students
Traders/ 
Businessmen
Farmers
Industrialists/ 
Professionals
Women’s Savings Groups
Page 3


73
 What does the picture above show? Find out about the nature of work done in this 
office. Make a note of your observations.
A Bank
 A bank is a government recognized organisation that carries out transactions of money.  
It is a financial organisation. Finance relates to money.
 We need to be prudent in spending 
the money we earn. We save money for 
use in the future. Our savings are meant 
to meet expenses on education, building 
a house, medical treatment, on our 
occupation such as for using improved 
14 Banks and Simple Interest
methods of agriculture, etc. Small savings 
made regularly accumulate over a period 
to become a large amount and prove 
useful in the future. An amount kept in a 
bank remains safe and also grows over the 
years.
Let’s learn.
Let’s recall.
74
Financial Transactions
 
?? In the above picture, who are the people shown to be using bank services?
?? 	 What does the symbol on the bag in the centre stand for?
?? 	 What do the arrows in the above picture tell you?
Project Work
?? 	 Teachers should organise a visit to a bank. Encourage the children 
to obtain some preliminary information about banks. Help them 
to fill some bank forms and slips for withdrawals and deposits.
?? 	 If there is no bank nearby, teachers could obtain specimen forms 
and get the children to fill them in class.
?? 	 Give a demonstration of banking transactions by setting up a 
mock bank in the school.
?? 	 Invite participation of parents who work in banks or other bank 
employees to give the children more detailed information about 
banking. 
Students
Traders/ 
Businessmen
Farmers
Industrialists/ 
Professionals
Women’s Savings Groups
75
Bank Accounts
 To use banking services one has to open 
an account in a bank. We need the following 
documents or papers to open a new bank 
account.
(1) Proof of residence : Ration card, electricity 
bill, telephone bill, domicile certificate, 
identity card, etc.
(2) Proof of identity : Aadhaar card, voter’s 
identity card, PAN card, passport or any 
other proof suggested by the bank, 
besides a reference from another customer 
who is an account holder. 
 A savings account is meant to induce a 
habit of saving money. An account holder 
can deposit money in the savings account as 
and when money is available. He/She may 
also withdraw/take out some money from 
that account occasionally if needed.
 Banks give an interest of 4% to 6% on 
the money in the savings account. The 
customer gets facilities like a pass- book, 
cheque book, ATM card, mobile banking, 
sms banking, Internet banking, etc. to operate 
the account. 
 We have to fill in certain printed slips to 
deposit money in an account or to withdraw 
it. Every bank has its own different forms, 
but the information to be given in it is                 
the same. 
 There is another kind of bank account 
called a current account. Money  can  be  
withdrawn  from it any number of  times, 
but one does not get any interest on the 
amount in this account.
 To get more interest, we have to keep 
a fixed amount in a bank for a longer period 
of time. We can avail of facilities like the 
Fixed Deposit (FD) or Recurring Deposit 
(RD) schemes for that purpose. 
Calculation of Interest
 Account holders of a bank are paid 
some amounts for keeping their money in 
the bank. On the other hand, people who 
borrow from a bank are charged an amount 
for the use of the money loaned to them. 
Such amounts are called interest. The 
money deposited in the bank or the money 
lent by a bank to a borrower is called              
the principal.
 When calculating interest on a deposit 
or a loan, the rate of interest is given for 
every 100 rupees. That rate of interest is 
for a given period of time. A rate of interest 
‘per cent per annum’, written as p.c.p.a., 
gives the amount of interest due on every 
hundred rupees for a period of one year, 
that is, annually.
Simple Interest
 In this class, we shall learn only about 
the interest charged for one year. This is 
simple interest. The interest charged for 
longer periods of time can often be quite 
complicated. That rate is different from 
simple interest.
Let’s learn.
Page 4


73
 What does the picture above show? Find out about the nature of work done in this 
office. Make a note of your observations.
A Bank
 A bank is a government recognized organisation that carries out transactions of money.  
It is a financial organisation. Finance relates to money.
 We need to be prudent in spending 
the money we earn. We save money for 
use in the future. Our savings are meant 
to meet expenses on education, building 
a house, medical treatment, on our 
occupation such as for using improved 
14 Banks and Simple Interest
methods of agriculture, etc. Small savings 
made regularly accumulate over a period 
to become a large amount and prove 
useful in the future. An amount kept in a 
bank remains safe and also grows over the 
years.
Let’s learn.
Let’s recall.
74
Financial Transactions
 
?? In the above picture, who are the people shown to be using bank services?
?? 	 What does the symbol on the bag in the centre stand for?
?? 	 What do the arrows in the above picture tell you?
Project Work
?? 	 Teachers should organise a visit to a bank. Encourage the children 
to obtain some preliminary information about banks. Help them 
to fill some bank forms and slips for withdrawals and deposits.
?? 	 If there is no bank nearby, teachers could obtain specimen forms 
and get the children to fill them in class.
?? 	 Give a demonstration of banking transactions by setting up a 
mock bank in the school.
?? 	 Invite participation of parents who work in banks or other bank 
employees to give the children more detailed information about 
banking. 
Students
Traders/ 
Businessmen
Farmers
Industrialists/ 
Professionals
Women’s Savings Groups
75
Bank Accounts
 To use banking services one has to open 
an account in a bank. We need the following 
documents or papers to open a new bank 
account.
(1) Proof of residence : Ration card, electricity 
bill, telephone bill, domicile certificate, 
identity card, etc.
(2) Proof of identity : Aadhaar card, voter’s 
identity card, PAN card, passport or any 
other proof suggested by the bank, 
besides a reference from another customer 
who is an account holder. 
 A savings account is meant to induce a 
habit of saving money. An account holder 
can deposit money in the savings account as 
and when money is available. He/She may 
also withdraw/take out some money from 
that account occasionally if needed.
 Banks give an interest of 4% to 6% on 
the money in the savings account. The 
customer gets facilities like a pass- book, 
cheque book, ATM card, mobile banking, 
sms banking, Internet banking, etc. to operate 
the account. 
 We have to fill in certain printed slips to 
deposit money in an account or to withdraw 
it. Every bank has its own different forms, 
but the information to be given in it is                 
the same. 
 There is another kind of bank account 
called a current account. Money  can  be  
withdrawn  from it any number of  times, 
but one does not get any interest on the 
amount in this account.
 To get more interest, we have to keep 
a fixed amount in a bank for a longer period 
of time. We can avail of facilities like the 
Fixed Deposit (FD) or Recurring Deposit 
(RD) schemes for that purpose. 
Calculation of Interest
 Account holders of a bank are paid 
some amounts for keeping their money in 
the bank. On the other hand, people who 
borrow from a bank are charged an amount 
for the use of the money loaned to them. 
Such amounts are called interest. The 
money deposited in the bank or the money 
lent by a bank to a borrower is called              
the principal.
 When calculating interest on a deposit 
or a loan, the rate of interest is given for 
every 100 rupees. That rate of interest is 
for a given period of time. A rate of interest 
‘per cent per annum’, written as p.c.p.a., 
gives the amount of interest due on every 
hundred rupees for a period of one year, 
that is, annually.
Simple Interest
 In this class, we shall learn only about 
the interest charged for one year. This is 
simple interest. The interest charged for 
longer periods of time can often be quite 
complicated. That rate is different from 
simple interest.
Let’s learn.
76
Example 1 :  Vinita deposited ` 15000 in a bank for one year at an interest rate of                          
7 p.c. p.a. How much interest will she get at the end of the year? 
In this example, the principal is ` 15000, period is 1 year, and rate of interest 
is 7 p.c.p.a. If principal increases, interest increases. That is, interest increases 
in proportion to the principal.
Let us suppose that the interest on the principal of ` 15000 is x.
  On principal ` 100, the interest is ` 7.
We shall take the ratio of interest to principal, write it in two forms and 
obtain an equation.
x
15000
  
=
7
100
x
15000
 × 15000  = 
7
100
 × 15000  (Multiplying both sides by 15000)
    x  = 1050 
Vinita will get an interest of ` 1050.
Example 2  : Vilasrao borrowed ` 20000 from a bank at a rate of 8 p.c.p.a. What is the 
amount he will return to the bank at the end of the year?
In this example, the principal is ` 20000. Rate is 8 p.c.p.a., that is, ` 8 is the 
interest on principal ` 100 for 1 year.  
Interest increases in proportion to the principal, that is, ratio of interest to 
principal remains constant. Let us write the ratio of interest to principal in 
two ways and obtain an equation.  
Let interest on principal 20000 rupees
 
be x rupees. 
Interest on principal 100 rupees is 8 rupees. 
x
20000 
=
 
8
100
x
20000
 × 20000 =
8
100
 × 20000  (Multiplying both sides by 20000)
     x  = 1600 
Amount to be returned to the bank = principal + interest = 20000 + 1600 = ` 21600 
(1) At a rate of 10 p.c.p.a., what would be the interest for one year on ` 6000?
(2) Mahesh deposited ` 8650 in a bank at a rate of 6 p.c.p.a. How much money will he
get at the end of the year in all?
(3) Ahmed Chacha borrowed ` 25000 at 12 p.c.p.a. for a year. What amount will he have
to return to the bank at the end of the year?
(4) Kisanrao wanted to make a pond in his field. He borrowed ` 35250 from a bank at an
interest rate of 6
 p.c.p.a. How much interest will he have to pay to the bank at the
end of the year? ?????? Practice Set 35