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SIMPLE INTEREST

IMPORTANT FACTS AND FORMULAE


1.
2.
3.

Principal: The money borrowed or lent out for a certain period is called the principal or the
sum.
Interest:
Extra money paid for using other's money is called interest.
Simple Interest (S.I.): If the interest on a sum borrowed for certain period is reckoned
uniformly, then it is called simple interest.
Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then
PxRxT
(i)

S.I. =

.
100
100 x S.I.

(ii)

P =

100 x S.I.
; R =

100 x S.I.
; and T =

RxT

PxT

PxR

Ex.1. A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The
sum is:
Sol.

S.I. for 1 year = Rs. (854 - 815) = Rs. 39.


S.I. for 3 years = Rs.(39 x 3) = Rs. 117.
Principal = Rs. (815 - 117) = Rs. 698.
2

Ex.2.

Find the simple interest on Rs. 3000 at 16

per annum for 9 months .


3

50
Sol.

P = Rs. 68000, R =

S.I. =

50
= Rs.

100

years =
12

PxRxT
:

% p.a and T =

68000 x

3
x

years.
4

1
x
100

= Rs. 8500.

Ex.3.

At what rate percent per annum will a sum of money double in 16 years ?

Sol.

Let principal = P. Then, S.I. = P and T = 16 years.

Rate =

100 x P

1
% = 6

P x 16

% p.a.
4

Ex.4. Mr. Thomas invested an amount of Rs. 13,900 divided in two different schemes A and B at the
simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest
earned in 2 years be Rs. 3508, what was the amount invested in Scheme B?
Sol.

Let the sum invested in Scheme A be Rs. x and that in Scheme B be Rs. (13900 - x).
x x 14 x 2

(13900 x) x 11 x 2

Then,

= 3508.

100

100

28x - 22x = 350800 - (13900 x 22)


6x = 45000
x = 7500.
So, sum invested in Scheme B = Rs. (13900 - 7500) = Rs. 6400.
3
Ex.5.

Calculate the simple interest on Rs. 7200 at 12

% per annum for 9 months.


4

PxRxT
Sol.

S.I. =

7200 x 51 x 9
=

100

4 x 12 x 100
51
r =

9
%, t =

yr

= Rs. 688.50

12

Ex.6.

At what rate percent per annum will a sum of money double in 8 yr. ?

Sol.

Let P = x, then A = 2x, S.I. = (2x x) = x,


T = 8 yr.
x x 100

SI x 100
R =

=
PxT

= 12.5%
xx8

Ex.7. A certain sum of money amounts to Rs 1560 in 2 years and Rs 2100 in 5 years . Find the rate
percentage per annum.
Sol.

Amount (Principal + Interest) for 2 years = Rs. 1560.


Amount (Principal + Interest) for 5 years = Rs. 2100.
Hence, interest for 3 year = (2100 1560) = Rs. 540.
Simple interest for 2 year = Rs. 360.

Principal = (1560 360) = Rs. 1200.


360 x 100
R =

= 15 %
1200 x 2

R = 15 %

Ex.8. The rate of interest on a sum of money is 4 % per annum for the first 2 years, 6 % per annum
for the next 3 years and 8 % per annum for the period beyond 5 years . If the simple interest accrued
by the sum for a total period of 8 years is Rs 1280. What is the sum?
Sol.

Rate of interest for first 2 yr. = 4 x 2 = 8%


Rate of interest for next 3 yr. = 6 x 3 = 18 %
Rate of interest for last 3 yr. = 8 x 3 = 24 %
Total rate of interest for 8 yr. = 50 %
P x 50
Then,

1280 =

: P = Rs. 2560.
100

[ Time of 8 yr is already adjusted in the total rate of interest calculation]

Ex.9. Sudha borrowed Rs 400 from her friend at the rate of 12 % per annum for
interest and the amount paid by her were.
400 x 5 x 12
Sol.

SI =

= Rs. 120
2 x 100

A = (400 + 120) = Rs. 520.

1
2 yr. The
2

Ex.10. A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at the rate of simple interest. What is the
rate of interest?
Sol.

S.I. = Rs. (15500 - 12500) = Rs. 3000.


100 x 3000
Rate =

% = 6%
12500 x 4

Ex.11. A person takes a loan of Rs. 200 at 5% simple interest. He returns Rs. 100 at the end of 1 year.
In order to clear his dues at the end of 2 years, he would pay:
Sol.

200 x 5 x 1
Amount to be paid = Rs.

100 +

100 x 5 x 1
+

100

100

= Rs. 115.
Ex.12. A lent Rs 600 to B for 2 years , and Rs 150 to C for 4 years and received altogether from both Rs
90 as interest . Find the rate of interest, simple interest being calculated .
Sol.

Rs.600 for 2 years = Rs. 1200 for 1 year


and Rs 150 for 4 years = Rs. 600 for 1 year
Int. = Rs. 90.
90 x 100

Rate =

= 5%
1800 x 1

Ex.13. A sum of money doubles itself in 10 years at simple interest. What is the rate of interest?
Sol.

Let the sum be Rs 100.


After 10 years it becomes Rs 200.

Interest = 200 100 = 100


100 x I
Then , rate =

100 x 100
=

Pxt

= 10 %
100 x 10

Ex.14. Rs. 4000 is divided into two parts such that if one part be invested at 3 % and the other at 5 % ,
the annual interest from both the investments is Rs. 144. Find each part.
Sol.

Let the amount lent at 3 % rate be Rs x , then

3 % of x + 5 % of (4000 x) = 144
or, 3x + 5 x 4000 5x = 14400
or, 2x = 5600

x = 2800

Thus the two amount are Rs. 2800 and Rs. (4000 2800) or Rs. 1200.
Ex.15. What is the market prices of a 3% Rs. 100 stock if it yields 4 % after paying an income an
income tax of 4 p in the rupee?
Sol.

Income tax of Rs 3 = 3 x 4P = 12P

Net income from Rs. 100 stock = Rs 3 12P = Rs. 2.88


Now,

Rs.4 = Interest on Rs 100


100

Rs 2.88 = interest on Rs.

x 2.88, i.e. , Rs. 72


4

Hence market price of the stock is Rs. 72.


Ex.16. A lent Rs. 600 to B for 2 years and Rs. 150 to C for 4 years and received altogether from both
Rs 90 as interest. Find the rate of interest , simple interest being calculated.
Sol.

Rs 600 for 2 years = Rs 1200 for 1 year


and

Rs 150 for 4 years = Rs 600 for 1 year


Total principal = Rs 1800 for 1 year
Interest = Rs 90
90 x 100

Rate

= 5%
1800 x 1

Ex.17. A borrowed Rs 5000 from B at simple interest. After 4 yr, B received Rs 1000 more than the
amount given to B on loan. The rate of interest was
5000 x R x 4
Sol.

1000 =
100
1000 x 100

R =

= 5%
5000 x 4

1
Ex.18. The simple interest on a sum of money is
of the principal and the number of years is
equal
25
to the rate percent per annum. The rate percent is
1
Sol.

PxRxR
or, R2 = 4

P =
25

: R = 2%

100

Ex.19. The simple interest on a sum of money is equal to the principal and the number of years is
equal to the rate percent per annum. The rate percent is
PxRxR
Sol.

or, R2 = 100

P=

: R = 10 %

100
Ex.20. If the simple interest on Rs 1200 be more than the interest on Rs 1000 by Rs 30 in 3 years . The
rate percent per annum will be
1200 x 3 x R
Sol.

1000 x 3 x R
-

= 30

100

100

36R 30R = 30 or,


R =5%

Ex.21. A man took loan from a bank at the rate of 12% p.a. simple interest. After 3 years he had to
pay Rs. 5400 interest only for the period. The principal amount borrowed by him was:
100 x 5400
Sol.

Principal = Rs.

= Rs. 15000.
12 x 3

Ex.22. A sum of money amounts to Rs. 9800 after 5 years and Rs. 12005 after 8 years at the same
rate of simple interest. The rate of interest per annum is:
Sol.

S.I. for 3 years = Rs. (12005 - 9800) = Rs. 2205.


2205
S.I. for 5 years = Rs

x5

= Rs. 3675

3
:

Principal = Rs. (9800 - 3675) = Rs. 6125.

100 x 3675
Hence, rate =

% = 12%
6125 x 5

Ex.23. The simple interest on Rs 1650 will be less than the interest on Rs 1800 at 4 % simple interest
by Rs 30 . Find the time.
Sol.

We may consider that Rs (1800 1650) gives interest of Rs 30 at 4 % per annum.


30 x 100

Time =

= 5 years
150 x 4

Ex.24. Arun and Ramu are friends. Arun borrowed a sum of Rs 400 at 5% per annum simple interest
from Ramu. He returns the amount with interest after 2 years . Ramu returns to Arun 2 % of the total
amount returned . How much did Arun receive?
Sol.

After 2 years amount returned to Ramu


400 x 5 x 2
= 400 +

= Rs. 440
100

Amount returned to Arun = 2 % of Rs 440 = Rs 8.80


Ex.25. A sum of money amounts to Rs. 850 in 3 years and Rs. 925 in 4 years .What is the sum?
Sol.

P + SI for 4 years = Rs 925


P + SI for 3 years = Rs 850
On subtracting, SI for 1 year = Rs 75

SI for 3 years = 3 x 75 = Rs 225

P = 850 225 = Rs 625

Ex.26. If Rs 64 amounts to Rs. 19.20 in 2 years, what will Rs. 86 amounts to in 4 years at the same
rate percent per annum?
19.20 x 100
Sol.

Rate of interest =

= 15%
64 x 2
86 x 15 x 4

Interest on Rs 86 =

= Rs 51.6
100

Amount = 86 + 51.6 = Rs. 137.6

Ex.27. Reena took a loan of Rs. 1200 with simple interest for as many years as the rate of interest. If
she paid Rs. 432 as interest at the end of the loan period, what was the rate of interest?
Sol.

Let rate = R% and time = R years.


1200 x R x R
Then,

= 432
100

12R2 = 432
R2 = 36
R = 6.
Ex.28. How much time will it take for an amount of Rs. 450 to yield Rs. 81 as interest at 4.5% per
annum of simple interest?
100 x 81
Sol.

Time =

years = 4 years.
450 x 4.5

Ex.29. A sum of Rs. 725 is lent in the beginning of a year at a certain rate of interest. After 8 months,
a sum of Rs. 362.50 more is lent but at the rate twice the former. At the end of the year, Rs. 33.50 is
earned as interest from both the loans. What was the original rate of interest?
Sol.

Let the original rate be R%. Then, new rate = (2R)%.


Note:
1
Here, original rate is for 1 year(s); the new rate is for only 4 months i.e.

years.
3

725 x R x 1
:

362.50 x 2R x 1
+

= 33.50

100

100 x 3

(2175 + 725) R = 33.50 x 100 x 3


(2175 + 725) R = 10050
(2900)R = 10050
10050
R=

= 3.46
2900

Original rate = 3.46%


Ex.30. What will be the ratio of simple interest earned by certain amount at the same rate of interest
for 6 years and that for 9 years?
Sol.

Let the principal be P and rate of interest be R%.


PxRx6
100

Required ratio =

6PR
=

PxRx9
100

6
=

9PR

= 2:3
9

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