Simple Interest:
Formula:
1) SI = P x R x T/100
2) Principal = Simple Interest ×100/ R × T
3) Rate of Interest = Simple Interest ×100 / P × T
4) Time = Simple Interest ×100 / P × R
5) If rate of Simple interest differs from year to year, then
Simple Interest = Principal × (R1+R2+ R3…..)/100
The four variables in the above formula are:
SI=Simple Interest
P=Principal Amount (This the amount invested)
T=Number of years
R=Rate of interest (per year) in percentage
1). A sum of money is divided into n parts in such a way that the interest on the first part at r_{1}% for t_{1} years, on second part at r_{2}% for t_{2} years, on third part at r_{3}% for t_{3}years and so on, are equal. Then the ratio in which the sum is divided in n part is:
1/r_{1}×t_{1}: 1/r_{2} ×t_{2}: 1/r_{3}×t_{3}
Example:
A sum of Rs 7700 is lent out in two parts in such a way that the interest on one part at 20% for 5 yr is equal to that on another part at 9% for 6 yr. Find the two sums.
Solution:
Here, R1 = 20% R2 = 9%
T1 = 5 yr T2 = 6 yr
By using formula, ratio of two sums = 1/100 : 1/54 = 27 : 50
Therefore, first part = [27/(27+50)]*7700 = Rs 2700
Second part = [50/(27+50)]*7700 = Rs 5000
2). Amount = Principal + S.I = p + [(p x r x t)/100]
Example:
What Principal will amount to Rs. 16000 in 6 years at 10% simple interest?
Solution:
Let the principal be Rs. p, given rate of interest is 10% and time = 6 years.
Amount received at the end of 6 years = 16000 Rs.
=> 16000 = p + (p x 10 x 6)/100 = p + 6p/10 = 16p/10 => P = 16000 x (10/16) = 1000 x 10 = 10000 Rs.
Principal should be Rs. 10000
3). If sum becomes n times in T yr at simple interest, then formula for calculating rate of interest
R =100(n1) /T %
4). A sum of money becomes 4 times in 20 yr at SI. Find the rate of interest?
R =100(41)/20
=100*3 / 20 =5*3 =15
5). If A sum becomes n times in at certain rate of interest .then the time taken in which the same amount will be n times at the same rate of interest:
= (n1)/2 × T (n = number of times)
6). If A sum becomes 3 times in at certain rate of interest in 5years .find the time taken in the same amount will be 8 times at the same rate of interest:
=(81)/2*5
= 7/2 * 5
=17.5years
37 videos53 docs148 tests

1. What is simple interest and how is it calculated? 
2. Can you provide an example of how to calculate simple interest? 
3. How is simple interest different from compound interest? 
4. What are the advantages of using simple interest? 
5. Are there any limitations or drawbacks to using simple interest? 
37 videos53 docs148 tests


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