Formulas for Simple Interest Problems

July 4, 2020

Formulas to Solve Simple interest Problems in Aptitude

Simple interest is a easy method of calculating the interest charge on a loan. Simple interest is calculated by multiplying the daily interest rate  by the principal by the number of days that elapse between payments i.e.  \frac{P * R * T}{100}

Formulas for Simple Interest

Simple Interest Formulas

  • Simple Interest is the rate at which we lend or borrow money. In simple terms, when a lender lends money to a borrower, the borrower has to pay an extra amount of money to the lender.  This extra amount of money is called interest. The interest on a sum borrowed for a certain period is called simple interest. 
  • Simple interest is calculated by multiplying the daily interest rate by the principal by the number of days that elapse between payments.
  • This type of interest usually applies to short-term loans,.
  • Basic Formula \frac{P * R * T}{100}

Formula for Simple Interest

  • Simple Interest Formulas

SI = \frac{P * R * T}{100}

Where,

P = money borrowed or lent out for a certain period(principal)

r = rate of interest

t = time period for which the amount is lent

Principal = \frac{100* SI}{R * T }

Rate = \frac{100 * SI }{P * T}

Time =  \frac{100* SI}{R * P }

 

To get total amount of money

  • Amount = Principal + Interest 
  • A = P + I

Formulas based Questions on Simple Interest

 

Example 1.  Find the simple interest on Rs. 65,000 at 6(2/3)% per annum for a period of 9 months?

Options
(A) 3520
(B) 3250
(C) 2350
(D) 5320

Solution      Principle = 65,000

Rate = 6 \frac{2}{3} \

Time = 9 months

Principle = 65,000

Rate =  \frac{20}{3} \

Time = \frac{3}{4} \

S.I =  \frac{P*R*T}{100} \

= Rs. [65000×(20/3)×(3/4)×(1/100)]

= 3250

Correct Option(B)

 

Example 2. What sum of money will amount to Rs. 520 in 5 years and Rs. 568 in 7 years at simple interest?

Options
(A) 350
(B) 400
(C) 550
(D) 500

Solution     Amount in 5 years = Rs 520

Amount in 7 years = Rs 568

2 years  S.I = 568-520 = 48

Simple Interest for 1 years = \frac{48}{2} \ = 24

5 years amount = Rs 520

For 1 years = 5*24 = 120

P = A – S.I = 520-120

P = 400

 

Read Also – Tips & tricks to solve simple interest questions