Simple Interest


 
 
Concept Explanation
 

Simple Interest

Rightarrow   that the interest is incurred simply on the principal amount   

OR   

Rightarrow   Simple interest is interest that is calculated each year as a fixed percentage of the original amount of money borrowed or invested . 

Formula:

Rightarrow    small Simple;Interest = frac{P X RX T}{100}    ,

where  P = initial amount , R = rate of interest , T =  time 

OR    

Rightarrow    SI = PIN       

where P = principal or initial amount , I = rate of interest in decimal form , N = time or duration    

Illustration: Mr Bector deposited a sum of Rs 5596 at a simple interest for 5 years at 10% rate of interest. Find Simple interest and the Amount.

Solution :   P = 5596 Rs.

          R = 10 %

          T = 5 Years

     small S.I. = frac{P X R XT}{100}= frac{5596 X 10 X 5}{100}= 2798; Rs

Amount = P + SI = 5596 + 2798 = 8394 Rs

Illustration:  Find the simple interest payable on an investment of $ 20000 at 12% p.a. over a period of 4 years ?

Solution :   here P = 20000 ,  R = 12% which is also 0.12  , N = 4 

now , SI = PIN

      SI =  20000times  0.12 times 4   =  9600 

So the simple interest is $9600 

Sample Questions
(More Questions for each concept available in Login)
Question : 1

If the simple interest on a certain sum for a period of three years at 4% per annum is Rs.48,then principal is:

Right Option : D
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Explanation
Question : 2

For how many years should Rs.1200 be invested at 10% p.a in order to earn the same simple interest as in earned by investing Rs.1800 at 12% p.a for 5 years?

Right Option : A
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Explanation
Question : 3

If the simple interest on a sum of money at 6% per annum for 2yr is Rs. 12. What is the sum of money ?

Right Option : A
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Explanation
 
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