Learn Simple Interest concept formula and tricks

Simple Interest

Many time we take money from banks and money lenders to meet our requirements. The bank or money lenders charges extra amount for using their money which is nothing but interest. The amount for money which is given in the form of interest is decided by the rate of interest.

Suppose, Rohit wants to buy a new car and he takes an amount of Rs 100000 from a money lender at the rate of 8% per year.It means Rohit will have to give 8% of 100000 extra money per year as an interest to the money lender.Here Rs 100000 is the principle amount.

Simple Interest Formula

  • SI=\frac{P*R*T}{100}
    P=Principle Interest
    R=Rate percent Per Annum
    T=Time Period (Time Period can be also in days or months.Convert it into years before applying into the formula)
  • We can simply derive few formula from above equation

  • P=\frac{SI*100}{R*T}

  • R=\frac{SI*100}{P*T}

  • T=\frac{SI*100}{P*R}

Note- (SI*100) remains constant in numerator and denominator changes.

I think we have understood the basic simple interest concept and formula.We can proceed further to solve some simple interest questions to brush up our simple interest concept.

Intext Simple Interest Problems

Find Simple interest for Principle amount Rs 10000 at rate of 10% per year for 3 years.Also find the total amount after 3 years.
Sol:-Here, P=Rs 10000
R=10%
T=3 years
So, SI=\frac{P*R*T}{100} = Rs 3000.
Total amount after 3 years= 10000 +3000=Rs 13000

A sum at simple interest of 10% becomes 3600 in 2 years.Find the simple interest and priciple amount.
Ans- Let the Principle amount P be x.

SI=(x*10*2)/100=(x/5)
Sum after 2 years = x + (x/5)
Equating according to given condition
(6x)/5 = 3600
x=3000.
and SI= 600

A sum of money trebles itself in 15 years and 6 months.In how many years it would double itself?
Ans- Time = 15(6/12)=31/2years
To treble the SI = 2P
2P = (P* R*T)/100
R=400/31
In order to double
SI=P
P=P*R*T/100
T=100/(R)=31/4 years = 7 years and 9 months

A sum of Rs-1550 money is lent out into two parts one at 8% and other at 6%.If the total annual income is Rs.106.Find the money lent at each rate?
Ans- Let one part is X other part will be 1550-X
S.I on 1st part=\frac{X*8*1}{100}
S.I on 2nd part=\frac{(1550-X)*6*1}{100}
Adding both S.I will give annual income
\frac{X*8*1}{100} + \frac{(1550-X)*6*1}{100} = 106
Solving this we get X=650
So 1st part=650
2nd part=900

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