Simple Interest Formulas, Shortcuts and Study Material

Interest is the cost of borrowing money.An interest rate is the cost stated as a percent of the amount borrowed per period of time, usually one year.

Simple Interest: Simple interest is calculated on the original principal only.Accumulated interest from prior periods is not used in calculations for the following periods. Simple interest is normally used for a single period of less than a year, such as 30 or 60 days.
Simple interest =

P = principal (original amount borrowed or loaned) R = interest rate for one period T = number of periods

Principal: The money borrowed or lent out for a certain period is called the principal or the sum.

Interest: Extra money paid for using other's money is called interest.

Simple Interest (S.I.): If the interest on a sum borrowed for certain period is reckoned uniformly, then it is called simple interest.

Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then

(i) Simple interest=

(ii) P=

Simple Interest Formulas

Example 1. A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is:

Answer: Rs.698. Explanation:
S.I. for 1 year = Rs. (854-815) = Rs. 39.
S.I. for 3 years = Rs. = Rs. 117.
Principal = Rs. (815-117) = Rs. 698.

Example 2.Mr. Thomas invested an amount of Rs. 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be Rs. 3508, what was the amount invested in Scheme B?

Answer: Rs.6400. Explanation:
Let the sum invested in Scheme A be Rs.x and that in Scheme B be Rs. (13900-x).
Then,=3508.

So, sum invested in Scheme B = Rs. (13900-7500) = Rs. 6400.

Example 3. A sum fetched a total simple interest of Rs. 4016.25 at the rate of 9 p.c.p.a. in 5 years.What is the sum?

Example 4. How much time will it take for an amount of Rs. 450 to yield Rs. 81 as interest at 4.5% per annum of simple interest?

Answer: 4 Years Explanation:
Time = years = 4 years.

Example 5. A person takes a loan of Rs. 200 at 5% simple interest. He returns Rs. 100 at the end of 1 year. In order to clear his dues at the end of 2 years, he would pay:

Answer: Rs.115. Explanation:
Amount to be paid
= Rs. = Rs.115.

Simple Interest Questions from Previous Year Exams

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Question 1 of 18

1. Question

1 points

Mahesh invested an amount of Rs. 12050 at simple interest. He got an amount of Rs. 13496 at the end of 2 yr. At what rate of interest did he invest?

Correct

Let the rate of interest be r% per annum.

(13496 - 12050) =

= 6 % per annum

Incorrect

Let the rate of interest be r% per annum.

(13496 - 12050) =

= 6 % per annum

Question 2 of 18

2. Question

5 points

If the difference between the simple and the compound interest earned on a sum of money at the rate of 5% per annum for 2 yr is Rs. 21, find the principal.

Correct

Let the principal be Rs. x

Incorrect

Let the principal be Rs. x

Question 3 of 18

3. Question

1 points

Sitaram invested an amount of Rs. 7450 @ 6% per annum rate of simple interest. After how many years will he obtain the total amount of Rs. 8791?

Correct

Incorrect

Question 4 of 18

4. Question

1 points

Asmita invests an amount of Rs. 9535 @ 4% per annum to obtain a total amount of Rs. 11442 on simple interest after a certain period. For how many years did she invest the amount to obtain the total sum?

Correct

Incorrect

Question 5 of 18

5. Question

1 points

Ms Suchi deposits an amount of Rs. 24000 to obtain a simple interest at the rate of 14 % per annum for 8 yr. What total amount will Ms Suchi get at the end of 8 yr?

Correct

The amount which Suchi will get

Incorrect

The amount which Suchi will get

Question 6 of 18

6. Question

1 points

What amount of compound interest can be obtained on an amount of Rs. 4500 at the rate of 4% per annum at the and end of 2 yr ?

Correct

Incorrect

Question 7 of 18

7. Question

1 points

What amount of compound interest can be obtained on an amount of Rs. 4800 @ 6 % per annum at the end of 2 yr?

Correct

Incorrect

Question 8 of 18

8. Question

1 points

What would be the compound interest obtained on an amount of Rs. 2000 at the rate of 15% per annum after 3 yr?

Correct

Incorrect

Question 9 of 18

9. Question

1 points

A sum of money doubles itself in 4 yr at compound interest. It will amount to 8 times itself at the same rate of interest in

Correct

Incorrect

The sum doubles in 4 yr.
It will be 8 times i.e.,2^{3}, times in 3 x 4 = 12 yr^{
}

Question 10 of 18

10. Question

1 points

If the compound interest on a certain sum for 2yr at 3% per annum be Rs. 101.50, then the simple interest on the same sum at the same rate and for the same time will be

Correct

Let the sum be Rs. x .

Incorrect

Let the sum be Rs. x .

Question 11 of 18

11. Question

1 points

Shivangi invested Rs. 15000 at the rate of interest of 10% per annum for 1 yr. If the interest is compounded every six months, what amount wilt shivang get,at the end of the year?

Correct

Incorrect

Question 12 of 18

12. Question

1 points

The difference between CI and SI on a certain,sum at 4% for 3 yr is Rs. 608. The sum is

Correct

Incorrect

Question 13 of 18

13. Question

1 points

Ram invests Rs. 5000 in a bond which gives interest at 4%
per annum during the first year, 5% during the second year and 10% during the third year. How much does he get at the third year?

get at the end of the third Year?

Correct

Incorrect

Question 14 of 18

14. Question

1 points

An amount of Rs. 25220 borrowed at 5% per annum, compounded yearly, is to be repaid in 3 equal instalments. The amount of each instalment is

Correct

Let the amount of each installment be Rs x.

Incorrect

Let the amount of each installment be Rs x.

Question 15 of 18

15. Question

1 points

Aniket deposited two parts of a sum of Rs. 25000 in different banks at the rate of 15% per annum and 18% per annum respectively. In one year, he got Rs. 4050 as the total interest. What was the amount deposited at the rate of 18% Per annum?

Correct

Let Aniket invests Rs. x at the rate of 18 % per annum.

Incorrect

Let Aniket invests Rs. x at the rate of 18 % per annum.

Question 16 of 18

16. Question

1 points

The simple interest on a sum of money is 4/9 of the principal and the number of years is equal to the rate per cent per annum. The rate per annum is

Correct

Let the rate of interest and time be r% per annum and r yr respectively.

%

Incorrect

Let the rate of interest and time be r% per annum and r yr respectively.

%

Question 17 of 18

17. Question

1 points

A certain sum of money invested at compound interest, compounded annually, becomes Rs. 8820 in 2 yr and Rs. 9261 in 3 yr. The rate of interest is

Correct

Incorrect

Let the principal and rate of interest be P and r % per annum respectively.

From Equation (i) and (ii), we get

%

Question 18 of 18

18. Question

1 points

In what time will Rs. 1000 becomes Rs. 1331 at 10% per annul compounded annually?

Correct

Principal = Rs. 1000; Amount = Rs. 1331; Rate = 10% p.a ,
Let the time be n years. Then,

=1331

==

So, n = 3 years.

Incorrect

Principal = Rs. 1000; Amount = Rs. 1331; Rate = 10% p.a ,
Let the time be n years. Then,

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