Learn all about What is Simple Interest and How to Calculate Simple Interest from here. Simple Interest is paid or received over a certain period for a fixed percentage of the principal amount. Get to see Solved Examples on finding the Simplest Interest and the terms involved in it with detailed explanation. Refer to Simple Interest Formula and learn about it in detail.
When we borrow or lend money for a certain period we need to pay back along with extra money for availing the facility.
Formula to Calculate SI = PTR/100
where P is the Principal
T is the Time duration
R is the Rate of Interest in Percentage
Formula to Calculate Amount = Principal + Interest
Examples on Simple Interest
1. Find simple interest on $4000 at 10% per annum for 2 years. Also, find the amount?
Solution:
From given data P = $4000
R = 10%
T = 2 years
Substitute the given data in the formula for Simple Interest
SI = PTR/100
= (4000*2*10)/100
= 80000/100
= 800
SI = $800
Amount = Principal + Interest
= $4000+$800
= $4800
2. Calculate the simple interest on $ 8400 at 5 % p.a. for 8 months?
Solution:
Principal = $ 8400
Rate of Interest = 5%
Time Duration n = 8 months
We know the formula to calculate Simple Interest for Months is given by
SI = (P × n × R)/ (12 ×100)
Substitute the given data in the above formula
SI = (8400*8*5)/(12*100)
= $280
3. John took a loan of $10000 from a bank on 8th February 2009 at the rate of 5% p.a. and paid back the same on 2nd July 2009. Find the total amount to be paid by John?
Solution:
Principal = $10000
Time = 20 days+ 31 days + 30 days + 31 days + 30 days + 2 days
= 144 days
Rate of Interest = 5 %
General Formula for SI = (PTR)/100
Changing the formula in accordance with daily basis we have SI = (P*R*n)/100*365
= (10000*5*144)/100*365
= $197.26
Amount to be paid = Principal + Interest
= $10000 + $197.26
= $10197.26
4. A some amounted to $ 4000 at 2% Per Annum for the period of 5 years. Find their sum?
Solution:
From the given data A = $ 4000
R = 2 % Per Annum
T = 5 years
P = ?
Consider the principal to be found as X.
SI = PTR/100
= x*5*2/100
= 10x/100
= x/10
A = P + I
= x+x/10
= 11x/10
We know from the given data Amount = $4000
Equating them we have
11x/10 = $4000
11x= $4000*10
x = $40000/11
x = $3636.36
Therefore, Principal is $3636.36.
5. Arun takes a loan of $10,000 to buy a truck at a rate of 10 % Simple Interest. Calculate the Annual Interest to be paid for the loan amount?
Solution:
From the given data Principal P = $10,000
T = 1 Year
R = 10%
SI PTR/100
= (10, 000*1*10)/100
= $ 1000
Amount = Principal + Interest
= $10,000 + $ 1000
= $11, 000
6. At what rate percent per annum a sum of Rs. 900 will become Rs. 3,600 in 10 years?
Solution:
P = Rs. 900, A = Rs. 3,600
T = 10 Years
I = A – P = 3600 – 900 = Rs. 2700
I = PTR/100
2700 = 900*10*R/100
R = (2700*100)/(900*10)
= 270000/9000
= 30%
At 30% Rate of Interest the Sum of Rs. 900 will become Rs.3600 in 10 years.
7. In how many times will a sum of money becomes 5 times itself as 30% per annum SI?
Solution:
Let the Amount be ‘x’.
After time ‘t’ money will be ‘5x’ then
Interest for time ‘t’ is
SI=5x−x=4x
Given Rate = 30% Per Annum
SI = PTR/100
4x = (x*t*30)/100
4*100/30 = t
t = 400/30
= 13.33 years
The Sum x will become 5x times itself at a 30% interest rate after a span of 13.33 years.
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