Simple Interest
Simple Interest
1)Principal or Sum :
The money borrowed from any bank or any other person is called Principal or Sum.
The principal is denoted by P.
2)Time :
The money borrowed from any bank of any other person for a fixed period is called Time.
Time is denoted by t.
3)Rate :
The money borrowed from any bank or any other person for a fixed period and fixed % is called a Rate.
Rate is denoted by r.
4) Interest :
Extra money paid for using others' money is called Interest.
5)Simple Interest :
If the interest is on a certain sum for a certain period and fixed rate it is called Simple Interest.
Simple Interest is denoted by SI.
6)Amount :
The sum of principal and interest is called Amount.
It is denoted by A.
Formula
Let Principal = P
Rate = R%
Time = T Then
P X R X T
1)SI = -----------------
100
SI X 100
2)P = -------------
R X T
SI X 100
3)R = ------------
P X T
SI X 100
4)T = --------------
P X R
5)A = P + SI
1)Rule :
P X R X T
SI = -------------------
100
Example :
Find SI on Rs 1000 at 5% per annum for 5 years.
Solution
1000 X 5 X 5
SI = --------------------
100
= Rs 250
2)Rule :
SI X 100
p = --------------
R X T
Example :
Find principal on 5% per annum for 5 years and SI Rs 250.
Solution
250 X 100
p = ----------------
5 X 5
= Rs 1000
3) Rule :
SI X 100
R = ----------------
P X T
Example :
A certain sum amounts to Rs 1008 in 2 years and Rs 1112 in 3 years. Find the rate.
Solution
for 1 year
SI = Amount - principal
= 1112 - 1008
= 104
for 2 years
SI = 2 X 104
= 208
Principal = 1008 - 208
= 800
100 X 104
Rate = ---------------
800 X 1
= 13 %
4) Rule :
SI X 100
T = --------------
P X R
Example :
SI on Rs 972 at 14% per annum for a certain time is Rs 476 .28 . Find the time.
Solution
100 X 476.28
T = ---------------------
972 X 14
= 3 years 6 month
5) Rule :
A = P + SI
Example :
Find SI and amount on Rs 1000 at 5% per annum for 5 years.
Solution
1000 X 5 X 5
SI = ------------------
100
= 250
A = 1000 + 250
= 1250
Exercise
1)Out of a sum of Rs 625, a part was lent at 5% and the other at 10% simple interest . If the interest on the first part after 2 years is equal to the interest on the second part after 4 years, then the second sum is
a) 125 b) 200 c)250 d) 300
2) A man invests an amount of Rs 15860 in the names of his three sons A, B, and C in such a way that they get the same interest after 2 , 3, and 4 years respectively . If the rate of simple interest is 5%, then the ratio of the amounts invested among A. B and C will be
a) 10 : 15 : 20 b) 110 : 115 : 120 c) 1/10 : 1/15 : 1/20 d) 1/110 : 1/115 : 1/120
3)The rates of simple interest in two banks A and B are in the ratio 5: 4. A person wants to deposit his total savings in two banks in such a way that he received equal half-yearly interest from both . He should deposit the savings in banks A and B in the ratio.
a) 5 : 2 b) 2 : 5 c) 4 : 5 d) 5 : 4
4)A sum was put at simple interest at a certain rate for 2 years. Had it been put at a 3% higher rate, it would have fetched Rs 72 more. The sum is
a) Rs 1600 b) Rs 1500 c) Rs 1200 d) Rs 1800
5)What annual payment will discharge a debt of Rs 580 due in 5 years, the rate being 8% per annum ?
a) Rs 166.40 b) Rs 65.60 c) Rs 100 d) Rs 120
Answer
1) a 2) c 3) c 4) c 5) c
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