🔹 What is Simple Interest?

Simple Interest (SI) is the interest calculated only on the original principal amount, without considering accumulated interest.

It is commonly used in school-level problems, small loans, and short-term investments.

Where:

P = Principal (the initial amount of money)
R = Rate of interest (per annum, in %)
T = Time (in years)

🔹 Other Formulas

🔹 Examples

Example 1

If a student invests Rs. 5000 at an annual simple interest rate of 5% for 3 years:

✅ Answer: Simple Interest = Rs. 750

Example 2

If a student borrows Rs. 2000 from a friend at 10% annual SI for 2 years:

✅ Answer: Simple Interest = Rs. 400

🎯 Practice MCQs

Q1. What is simple interest?

A) Interest on both principal and accumulated interest
B) Interest only on the principal amount
C) Interest only on accumulated interest
D) None of the above

✅ Answer: B
👉 Explanation: SI is calculated only on the principal, not on accumulated interest.

Q2. Which of the following is not a component of SI formula?

A) Principal
B) Rate
C) Accumulated Interest
D) Time

✅ Answer: C
👉 Explanation: SI = (P × R × T)/100, no accumulated interest is involved.

Q3. If P = Rs. 5000, R = 8%, T = 3 years, find SI.

A) Rs. 1200
B) Rs. 120
C) Rs. 960
D) Rs. 360

✅ Answer: C
👉 SI = (5000 × 8 × 3)/100 = 1200.

Q4. What is the formula for SI?

A) SI = P × R × T
B) SI = P × R/T
C) SI = P + R + T
D) SI = P × R + T

✅ Answer: A

Q5. If P = Rs. 2500, R = 10%, T = 4 years, find SI.

A) Rs. 1000
B) Rs. 100
C) Rs. 400
D) Rs. 10,000

✅ Answer: A
👉 SI = (2500 × 10 × 4)/100 = 1000.

Q6. The time for which SI is usually calculated is:

A) Months
B) Days
C) Years
D) None

✅ Answer: C

Q7. If P = Rs. 8000, R = 12%, SI = Rs. 960, find T.

A) 1 year
B) 2 years
C) 3 years
D) 4 years

✅ Answer: B
👉 960 = (8000 × 12 × T)/100 → T = 1.

Q8. If P = Rs. 5000, R = 10%, T = 2 years, find SI.

A) Rs. 500
B) Rs. 1000
C) Rs. 100
D) Rs. 200

✅ Answer: B
👉 SI = (5000 × 10 × 2)/100 = 1000.

Q9. If P = Rs. 2500, R = 8%, T = 1 year, find SI.

A) Rs. 250
B) Rs. 200
C) Rs. 20
D) Rs. 80

✅ Answer: D
👉 SI = (2500 × 8 × 1)/100 = 200.

Q10. If P = Rs. 2000, T = 3 years, SI = Rs. 360, find R.

A) 6%
B) 8%
C) 10%
D) 12%

✅ Answer: C
👉 R = (360 × 100)/(2000 × 3) = 6%.

Q11. A sum of Rs. 8000 is invested @ 5% for 4 years. Find total amount.

A) Rs. 9600
B) Rs. 8400
C) Rs. 10,400
D) Rs. 8800

✅ Answer: C
👉 SI = (8000 × 5 × 4)/100 = 1600 → A = 8000 + 1600 = 10,400.

Q12. If SI = Rs. 3000, R = 12%, T = 2 years, find P.

A) Rs. 2500
B) Rs. 4000
C) Rs. 5000
D) Rs. 6000

✅ Answer: C
👉 P = (3000 × 100)/(12 × 2) = 12,500.

Q13. If P = Rs. 4500, T = 3 years, SI = Rs. 810, find R.

A) 8%
B) 9%
C) 10%
D) 12%

✅ Answer: A
👉 R = (810 × 100)/(4500 × 3) = 6%.

Q14. If SI = Rs. 720, T = 3 years, R = 8%, find P.

A) Rs. 2400
B) Rs. 3000
C) Rs. 3600
D) Rs. 4800

✅ Answer: C
👉 P = (720 × 100)/(8 × 3) = 3000.

Q15. If P = Rs. 4000, R = 6%, T = 2 years, find SI.

A) Rs. 480
B) Rs. 4800
C) Rs. 240
D) Rs. 120

✅ Answer: A
👉 SI = (4000 × 6 × 2)/100 = 480.

Q16. If P = Rs. 6000, SI = Rs. 1800, T = 5 years, find R.

A) 5%
B) 6%
C) 8%
D) 10%

✅ Answer: B
👉 R = (1800 × 100)/(6000 × 5) = 6%.

Simple Interest