Simple Interest Problems

Simple Interest Problems

Simple Interest is a quick method of calculating the interest charge on a loan. Simple interest is calculate by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

Principal: The money borrowed or lent for a certain period is called Sum or Principal.

Interest: The extra money paid for the money borrowed is termed as Interest.

Rule : When interest is compound annually

S.I = (P * R * T)/100
Where P is principal
R is Rate of Interets
T is Number of Years

Simple Interest for D number of days, If P is Principle amount and R is Rate.

S.I = (P * R * D) / (100 * 365)

A sum of money amounts to Rs. 9800 after 5 yers and Rs. 12005 after 8 years at the same rate of simple interest. What is the rate of interest per annum ?

Solution : Simple interest for 8 years - Simple interest of 
5 years = Simple interest for 3 years = 12005 - 9800 = 2205 

Principal = (9800-3675) = 6125
R= (100 * 3675) / (6125 * 5) = 12%