What is Simple Interest?
Simple interest is a type of interest that is calculated on the original principal amount, without taking into account any accumulated interest over time.
The formula to calculate simple interest is straightforward:
Simple Interest Formula
The formula for simple interest is straightforward:
Simple Interest (SI) = P × T × R ⁄ 100
where:P=Principalr=Interest raten=Term of loan, in years
Simple Interest=P×r×n
where:P=Principalr=Interest raten=Term of loan, in years
To calculate the Principal Amount, the formula is:
P = (S.I × 100) / RT
To find the rate of interest, the formula will be:
R = (S.I × 100)/ PT
R (in decimal ) = S.I/PT
Thus, the rate of interest in percent is given by:
R = R * 100
To get the time, formula is:
T = (S.I × 100) / PR
- Principal amount: The initial amount of money that is borrowed or invested.
- Rate: The percentage of interest charged or earned per time period.
- Time: The duration for which the interest is calculated, typically expressed in years.
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For example, if a student invests Rs. 5000 at an annual simple interest rate of 5% for 3 years, the simple interest would be calculated as follows:
Principal amount (P) = Rs. 5000
Rate (R) = 5%
Time (T) = 3 yearsSimple Interest (SI) = (5000 x 5 x 3)/100 = Rs. 750
So, the simple interest earned by the student would be Rs. 750.
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For example, if a student borrows Rs. 2000 from a friend at an annual simple interest rate of 10% for 2 years, the simple interest would be calculated as follows:
Principal amount (P) = Rs. 2000
Rate (R) = 10%
Time (T) = 2 yearsSimple Interest (SI) = (2000 x 10 x 2)/100 = Rs. 400
So, the simple interest that the student would need to repay to their friend after 2 years would be Rs. 400.
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What is simple interest?
A. Interest calculated on both the principal amount and accumulated interest
B. Interest calculated only on the principal amount
C. Interest calculated only on the accumulated interest
D. None of the aboveAnswer: B. Interest calculated only on the principal amount
Explanation: Simple interest is calculated only on the principal amount, which is the initial amount of money invested or borrowed, and does not take into account any accumulated interest over time.
Which of the following is not a component of the simple interest formula?
A. Principal amount
B. Rate
C. Accumulated interest
D. TimeAnswer: C. Accumulated interest
Explanation: Accumulated interest is not a component of the simple interest formula. The formula for simple interest is SI = P x R x T, where P is the principal amount, R is the rate of interest, and T is the time period for which the interest is calculated.
If the principal amount is Rs. 5000, the rate is 8%, and the time is 3 years, what is the simple interest?
A. Rs. 1200
B. Rs. 120
C. Rs. 960
D. Rs. 360Answer: D. Rs. 360
Explanation: Using the formula SI = P x R x T, substituting the given values, we get SI = 5000 x 8/100 x 3 = Rs. 360.
What is the formula to calculate simple interest?
A. SI = P x R x T
B. SI = P x R/T
C. SI = P + R + T
D. SI = P x R + TAnswer: A. SI = P x R x T
Explanation: The formula for calculating simple interest is SI = P x R x T, where P is the principal amount, R is the rate of interest, and T is the time period for which the interest is calculated.
If the rate of simple interest is 10% and the time is 4 years, what will be the simple interest for a principal amount of Rs. 2500?
A. Rs. 1000
B. Rs. 100
C. Rs. 400
D. Rs. 10000Answer: C. Rs. 400
Explanation: Using the formula SI = P x R x T, substituting the given values, we get SI = 2500 x 10/100 x 4 = Rs. 400.
What is the time period for which the interest is calculated in simple interest?
A. Months
B. Days
C. Years
D. None of the aboveAnswer: C. Years
Explanation: The time period for which the interest is calculated in simple interest is usually in years. It represents the duration for which the principal amount is invested or borrowed.
If the principal amount is Rs. 8000, the rate is 12%, and the simple interest is Rs. 960, what is the time period?
A. 1 year
B. 2 years
C. 3 years
D. 4 yearsAnswer: B. 2 years
Explanation: Using the formula SI = P x R x T, and substituting the given values, we get 960 = 8000 x 12/100 x T. Solving for T, we get T = 2 years.
A sum of Rs. 5000 is invested at a simple interest rate of 6% per annum for 3 years
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If the principal amount is Rs. 5000, the rate is 10%, and the time is 2 years, what is the simple interest?
A. Rs. 500
B. Rs. 1000
C. Rs. 100
D. Rs. 200Answer: A. Rs. 500
If the rate of simple interest is 8% per annum and the principal amount is Rs. 2500, what will be the interest for 1 year?
A. Rs. 250
B. Rs. 200
C. Rs. 20
D. Rs. 80Answer: D. Rs. 80
If the time period for which the interest is calculated is 3 years, the principal amount is Rs. 2000, and the simple interest is Rs. 360, what is the rate of interest?
A. 6%
B. 8%
C. 10%
D. 12%Answer: C. 10%
A sum of Rs. 8000 is invested at a simple interest rate of 5% per annum for 4 years. What will be the total amount after 4 years?
A. Rs. 9600
B. Rs. 8400
C. Rs. 10400
D. Rs. 8800Answer: C. Rs. 10400
If the simple interest on a certain amount is Rs. 3000 at a rate of 12% per annum for 2 years, what is the principal amount?
A. Rs. 2500
B. Rs. 4000
C. Rs. 5000
D. Rs. 6000Answer: B. Rs. 4000
If the principal amount is Rs. 4500, the time is 3 years, and the simple interest is Rs. 810, what is the rate of interest?
A. 8%
B. 9%
C. 10%
D. 12%Answer: A. 8%
If the simple interest on a certain amount is Rs. 720 for 3 years and the rate of interest is 8% per annum, what is the principal amount?
A. Rs. 2400
B. Rs. 3000
C. Rs. 3600
D. Rs. 4800Answer: C. Rs. 3600
If the rate of simple interest is 6% per annum and the principal amount is Rs. 4000, what will be the interest for 2 years?
A. Rs. 480
B. Rs. 4800
C. Rs. 240
D. Rs. 120Answer: A. Rs. 480
If the time period for which the interest is calculated is 5 years, the principal amount is Rs. 6000, and the simple interest is Rs. 1800, what is the rate of interest?
A. 5%
B. 6%
C. 8%
D. 10%Answer: B. 6%
