- The amount which is lent / deposited is called Principal
- The money that the principal generates is called Interest. This is the money generated as a result of borrowing/lending.
- Simple Interest is the interest calculated on the Principal amount, rather than being calculated on cumulative amount.
- Simple Interest, SI = P x R x T / 100, where P is the principal, R is the rate of interest per unit time period and T is the time period.
- Final Amount = Principal + SI
Question 1 : What would be the annual interest accrued on a deposit of Rs. 10,000 in a bank that pays 4 % per annum rate of simple interest ?
Solution : Here, P = 10000, R = 4, T = 1
=> SI = P x R x T / 100
=> SI = 10000 x 4 x 1 / 100
=> SI = 400
Thus, the annual interest would be Rs. 400
Question 2 : A sum of money amounts to Rs. 28,000 in 2 years at 20 % simple interest per annum. Find the sum.
Solution : Here, A = 28000, T = 2, R = 20
=> A = P + SI
=> A = P + (P x R x T / 100)
=> A = P [1 + (R x T / 100)]
=> 28000 = P [1 + 0.4]
=> P = 28000 / 1.4
=> P = 20000
Thus, the required sum is Rs. 20,000
Question 3 : A man borrowed a certain sum of money at the rate of 6 % per annum for the first two years , 9% per annum for the next three years, and 14% per annum for the period beyond 5 years. If he pays a total interest of Rs. 22,800 at the end of 9 years, find the amount he borrowed.
Solution : Let the borrowed sum be P.
=> SI for first 2 years + SI for next 3 years + SI for next 4 years = 22800
=> (P x 6 x 2 / 100) + (P x 9 x 3 / 100) + (P x 14 x 4 / 100) = 22800
=> 95 P / 100 = 22800
=> P = 24000
Therefore, Borrowed sum = Rs. 24,000
Question 4 : At what annual rate of interest will a sum of money be thrice in 10 years?
Solution : Amount = Principal + SI
If the sum of money would be thrice the principal after 10 years, the SI would be twice the principal.
=> SI = 2 x P
=> (P x R x T / 100) = 2 X P
=> R x T / 100 = 2
=> R x T = 200
=> R x 10 = 200
=> R = 20 %
Thus, the required rate of interest is 20 %
Question 5 : The simple interest on a sum of money in 5 years at 12 % per annum is Rs. 400 less than the simple interest accrued on the same sum in 7 years at 10 % per annum. Find the sum.
Solution : Let the sum be P.
=> SI in 5 years at 12 % per annum = P x 12 x 5 / 100 = 0.6 P
=> SI in 7 years at 10 % per annum = P x 10 x 7 / 100 = 0.7 P
Now, according to the question,
0.7 P – 0.6 P = 400
=> 0.1 P = 400
=> P = 4000
Thus, the required sum is Rs. 4000
Question 6 : A sum of Rs. 1000 was lent to two people, one at the rate of 5 % and other at the rate of 8 %. If the simple interest after one year is Rs. 62, find the sum lent at each rate.
Solution : Let the sum lent at 5 % be P.
=> Sum lent at 8 % = 1000 – P
Now, according to the question,
SI for 5 % + SI for 8 % = 62
=> (P x 5 x 1 / 100) + ((1000 – P) x 8 x 1 / 100) =62
=> 5 P + 8 (1000 – P) = 6200
=> 5 P + 8000 – 8 P = 6200
=> 3 P = 1800
=> P = 600
Therefore, sum lent at 5 % = P = Rs. 600
Sum lent at 8 % = 1000 – P = Rs. 400
This article has been contributed by Nishant Arora
Please write comments if you have any doubts related to the topic discussed above, or if you are facing difficulty in any question or if you would like to discuss a question other than those mentioned above.
Please write comments if you find anything incorrect, or you want to share more information about the topic discussed above
Attention reader! Don’t stop learning now. Get hold of all the important DSA concepts with the DSA Self Paced Course at a student-friendly price and become industry ready.