DERIVATION OF THE FORMULA TO CALCULATE SIMPLE INTEREST
The money borrowed or lent out for a certain period Principle
is called How can you represent principle in the form of principle hundreds? 100 What is meant by rate of simple interest? Interest is generally expressed as percent of the principle for a period of one year. For example: the interest paid for a principle of rs 100 for 1 year.
10% Rate of interest means? 10/- interest on Rs 100 principle for 1 year.
What is the simple interest for the principle Rs 200
at the same rate of interest? 20/-
What is the simple interest for the principle Rs 400
at the same rate of interest? 40/-
What is the simple interest for the principle Rs 800
at the same rate of interest? 80/-
What is the simple interest for the principle of ‘P’ at P x 10
the same rate of interest? 100
Why did you say P/100 instead of ‘P’ ? To represent ‘P’ In terms of percentage.
What is the simple interest for the principle of ‘P’ at
P X 10 X 2 the same rate of interest at the end of 2 years? 1OO
What is the simple interest for the principle of ‘P’ at
P X 10 X 3 the same rate of interest at the end of 3 years? 1OO
What is the simple interest for the principle of ‘P’ at
P X 10 X 5 the same rate of interest at the end of 5 years? 1OO What is the simple interest for the principle of ‘P’ at P X 10 X T the same rate of interest at the end of ’ T’ years? 1OO
What is the simple interest for the principle of ‘P’ at PXRXT
the R% rate of interest at the end of ’ T’ years? 1OO
This can be written as Simple interest (S.I) = P X T XR