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Academy

TOPIC: SIMPLE INTEREST

FORMULAE:

i. SI = (P * N * R)/100
Where,
SI Simple Interest
P Principal
R Rate percent per annum
N Number of years
A Amount

ii. Amount (A) Principal (P) + Interest (SI)

iii. Principal (P) (100 * A) / (100 + RT)

iv. (ART) / (100 + RT)

EXAMPLE PROBLEMS

EXAMPLE 1:

In what time 1200 will become 1450. When annual rate of interest is 20%?

Solution:

P (Principle) = 1200, A (Amount) = 1450, R (Rate of Interest) =20%

A = P + SI

1450 = 1200 + SI

SI = 1450 1200

SI = 250

SI = (PRT) / 100

250 = (1200* 20 * T) / 100

250 = 240T
T= 25 / 24

Answer => T = 1 (1 /24) yrs

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EXAMPLE 2 :

A Sum at simple interest of 4% per annum amounts to 3120 in 5 yrs. Find the sum?

Solution :

T (No. of Years) = 5 yrs, R (Rate of Interest) = 4%, A (Amount) = 3120

Method 1 :

P= (100 * A) / (100 + RT)

= (100 * 3120) / (100 + 4 * 5)

= (100 * 3120) / 120

Answer => P = 2600

Method 2:

SI = PRT / 100

= (P * 4 * 5) / 100

SI = P / 5

Amount = P + SI

= P + (P / 5) = 6P / 5

According to the question,

Amount = 3120 = 6P / 5 = 3120

P = (3120 * 5) / 6 = 2600

Answer => P = 2600

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Note 1 :

If a sum of money becomes n times in T yr at simple interest, then formula for calculating rate of interest
will be given as

R = [ 100 (n - 1)] / T %

Example :-

1) A sum of money becomes 4 times in 20 yrs at simple interest. Find the rate of interest?
Solution :

T (No. of Years) = 20 yrs, n = 4

R = [100 (n - 1) / T]

= [100 (4 - 1) / 20]

= (100 * 3) / 20

Answer => R = 15 %
Note 2 :

If a sum of money at a certain rate of interest becomes n times in T1 yr and m times in T2 yr, then
formula for T2 will be given as

T2 = [(m - 1) / (n - 1)] * T1

Example :

If a sum of money at simple interest becomes 4 times of itself in 15 yrs, it will become 3 times in,

Solution :

T1 = 15 yrs, n = 4, m = 3,

T2 = [(m -1) / (n - 1)] * T1

= [(3 - 1) / (4 - 1)] * 15

= (2 / 3) * 15

Answer => T2 = 10 yrs

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Note 3 :-

If a sum of money in a certain time becomes n times at R1 rate of interest and m times at R2 rate of
interest, then formula for R2 will be given as,

R2 = [(m - 1) / (n - 1)] * R1

Example :-

In a certain time, a sum becomes 3 times at the rate of 5 % per annum. At what rate of interest, the sum
becomes 6 times in same duration?

Solution :

n = 3, m = 6, R1 = 5%, R2 = ?

R2 = [(m - 1) / (n - 1)] * R1

= [(6 - 1) / (3 - 1)] * 5

= [5 / 2] * 5

= 25 / 2

Answer => R2 = 12.5 %

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EXERCISE PROBLEMS (For detailed Solutions, see next page):

1 ) In what time, does a sum of money become fourfold at the simple interest rate of 10 % per annum?

a) 10 years b) 20 years c) 30 years d) 40 years

2 ) A certain sum becomes 3 fold at 4 % annual rate of interest. At what rate, it will become 6 fold?

a) 10 % b) 12 % c) 15 % d) 20 %

3 ) A sum of 2668 amounts to 4669 in 5 yrs at the rate of simple interest. Find the rate percent

a) 10 % b) 12 % c) 15 % d) 20 %

4 ) Find the difference in amount and principal for 4000 at the rate of 5 % amount interest in 4 yr?

a) 780 b) 800 c) 810 d) 820

5 ) A sum of money triple itself at SI in 12 yrs. In how many years will it become 9 times?

a) 36 years b) 40 years c) 42 years d) 48 years

6 ) Amit takes some loan from Akash for 2 yr at the rate of 5 % per annum and after 2 yr he gave back
6600 to Akash and completed the payment of his loan. Find the interest paid by Amit?

a) 330 b) 450 c) 600 d) 820

For detailed solutions, see next page.

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SOLUTIONS FOR EXERCISE PROBLEMS:

1)

Solution :

N = 4, R = 10 %

R = [100 * (n - 1)] / T

10 = [100 * (4 - 1)] / T

10 = [100 * 3] / T

T = 30 yrs

Answer => c) 30 years

2)

Solution :

M = 6, n = 3, R1 = 4

R2 = [(m - 1) / (n - 1)] * R1

= [(6 - 1) / (3 - 1)] * 4

= [5 / 2] * 4

R2 = 10 %

Answer => a) 10 %

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3)

Solution :

N = 5, P = 2668, A = 4669

SI = A P

= 4669 2668 = 2001

SI = 2001

SI = PNR / 100

2001 = (2668 * 5 * R) / 100

R = 15 %

Answer => c) 15%

4)

Solution :

R = 5 %, N = 4, P = 4000

SI = PNR / 100

= (4000 * 5 * 4) / 100

SI = 800

A = SI + P

= 800 + 4000

A = 4800

Difference in amount and principal,

SI = A P => 4800 4000

SI = 800

Answer => b) 800

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5)

Solution :

M = 9, n = 3, T1 = 12

T2 = [(m - 1) / (n - 1)] * T1

= [8 / 2] * 12

T2 = 48 yrs

Answer => d) 48 years

6)

Solution :

T = 2 yr, R = 5%, A = 6600

SI = ART / (100 + RT)

SI = (6600 * 5 * 2) / (100 + 5 * 2)

= (6600 * 10) / 110

SI = 600

Answer => c) 600

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