r

sJMPLE INTEREST , ,

§ TERMS USED
1 Simple Interest : . h the tender gets from a borrower, in consider.at·
· ney wh1c ton
It is the extra mo ' d by the borrower. Of ~e i
sum (money borrowed) use (S ) and interest (I) mean the same. '
1
The terms simple interest . .

2. Principal (P): h' h the tender gives to a borrower.

It is the sum (money) w ,c
3 Rate or Rate of Interest (R) :
. It is the interest for a fixed period on every t 100.
e.g. (i) Rate of interest is 18% per year means, on t 100 the interest in one Year
is f 18.
(ii) Rate is 1.5% per month means, the interest of one month on 100 .
f 1.5, i.e., f 1.50.

4. Time Period (T) :

It is the time for which the sum (principal) is borrowed or lent.
1

1. Questions on interest involve four quantities : the Principal (P), the Rate of
Interest (R), the Period (T) and the Interest (I) for that period.
And, all these are related to each other as :
PrincipalxRatexTime PxRxT
Interest = _ _,:______ ,· e I -- - -
100 .. , 100
PxRxT
2· The formula 1 =
100 can also be expressed as :
(i) p = Ix100 (ii) R= Ix100 Ix100
RxT PxT
("')
Ill
T= --
PxR
5. Amount (A) :
I~ is the sum of the Principal and the Interest on it.
.. Amount = Principal + Interest -
Example 1 : i.e., A- P + 1
Find the am
ount of a loan of t 3 00
Solution: ' Oat 4% per year and for 5 years.
Given : p = { 3
'000 ' R= 4% and T = 5 years.
Interest 1 _ Px Rx T 3 000 xx
•--'F• 4 5
And, Amount = P I
100 =' 100 = 600.
+ ={3000 600
128 - - - ' + = 3,600
1
hoOI.,..
~ - - - - Concise MATHEMATICS Middle Sc
 oJution : .
S · Ti..,e
"· is always taken r
th according to the percentage rate , ,·•e., •,t th e rate .1s given
.
Note ~num, i.e., per yea_r, e ,me muS be taken in years and if the rate is per month
t
per must be taken m months. ,
~e t1rne
1 Since, in this example, Rate = 6% per month.
. Time should be taken in months.
NoW, p 800, R = 6% per month and T = g months.
=
p x R x T = 800 x 6 x 9
I = 100 100 = r 432 (Ans.)

example 3 :
Find the SJ. on 900 lent on August 10 and received back on October 22 of the

r the rate being 8 % p.a. (per annum).

58me
Yea ,

solution :
Given: P= 900, R =8 !% p.a. = 3: % p.a.
August September October
T = 21 + 30 + 22
(31 - 10)
73
= 73 days = 365 years = 51 years [As rate is p.a.]

Px Rx T 900x35x1
S.I. = 100 =f 100x4x5 =f 15·75 (Ans.)

For finding time, the starting date is not included.

In example 3, given above, the starting date is 10th August. Therefore, from total number
of days in August, 10 days are subtracted. But the last date, i.e., October 22 is included.

Example 4:
(i) What sum will earn an interest of f 480 in 3 years, at 16% per year ?
(ii) In what time will f 2,100 fetch an interest of f 525 at 5% p.a. ?
(iii) At what rate percent per year will a sum of money double itself in 1O years ?

Solution :

(i) Given : I= f 480, T = 3 years and R = 16%

Ix100 480x100 (Ans.)
Sum (P) = R x T = t 16 x 3 = t 1,000

(ii) Given : P = 2,100, I = 525 and R = 5%

Time (T) = I;x1 ~O 525 x 100 years
= 2,100 X 5
=5 years (Ans)

Sirnp1a interest _ _ _ _ _ _ _ _ _ _ __ _ __ _ __ _ _ _ _ _ _ fMQ'\

 t 200
,. 100, A:::: _"' 100
p ::: ' t
100 - '
I :::: t 200 - 100 X 1QQ_ = 10%
(iii) Given : :::: Too
x 10
n,en, T
Rate% (R) :::: p X

:. t 992 at 4% in 6 years ?
5. ·11 arnount to
Example . of rnoneY w1
Whal surn
. . bet 100.
sotut1on . ( nncipal) T 100 x 4 x 6 = t 24
Let the surn p - =t 100
t
1ntereS -
100 + t 24 = t 124
_ p +I= t 100
amount (A) - . p = t 100 [Applying Unit~
And, When A == t 124 ' 100 •,qry
2
-"99; p: t 124 X 992 = t 800 ·~
When A -'
=>
. method :
Alternative pxRxT p
i.e. t
I

A::P+l =>
A :: P + 100 992 :: p +
100P + 24 P 1~ 1
=> t 992 == 100 i.e. t 992 X 100:: 124 p
992 X 100 = 800
P == t 124

Example : will. .it take t 1'500 to become

How 6long 2,040 at 8% per annum simple interest .
1

Solution : . A _ t 040 and R = 8% I

Given: p = { 1,500, - 2'
:. I = A- p = f 2,040 - f 1,500 = 540

And, so, Time (T) = llxR

Ix 100 I
540x100
= 1,500x8 years =
9
-
2
years = 4
1
-
2
years (~
I
1 1 I
[4- years= 4 years +
2 year
2
1
= 4 years+
2 x 12 months
= 4 years + 6 months
or 4 years and 6 months]
Example 7: I

A invests f S.000 and B invests t 11 000 at the same rate of intereSt per annum.
at the end of 3 Years, B gets 't 720 more interest
' than A; find the rate Of ·'"terest.
Solution :

Let the rate of interest= A% per annum.

130
t---------__.:___ Concise MATHEMATICS
M'ddle
1
~--
 p == 8,000 and T = 3 years
8,OOOxRx3 _ .. l=PxRxT1
I == - 240 R [. 100
100
p == 11,000 and T = 3 Years
11,OOOxRx3
I == OO = 330 R
1
330 A - 240 R = 720 [ ·: B gets 720 more interest than A]
72
90 R = 720 and R = 0 =a
90
Rate of interest = 8% (Ans.)
::::>
tive method :
A/ferf18 .
,. . e A invests f 8,000 and B invests 11,000
s,nc '
.-. invests t (11,000 - 8,000) = f 3,000 more than A
8
::::> Interest of 3 years on f 3,000 = f 720

3QQOxRx3 = 720 f._.

L
PxRxT
100
=l1
100
90 R = 720 and R = 720 = 8
90
:. Rate of interest = 8% (Ans.)

example 8: .
7
A sum of money lent on simple interest, becomes of itself in 4 years. Find the
5
rate of interest per annum.

sotution :
Let the sum of money (Principal) = t x
7 7x
Amount (A) = - x f x = -
5 5
Simple interest (I) earned = A - P
7x 2x
=f
5 -~x=t
5
100xl
Rate% = PxT %
2x
100x- 100x2x
= 5 %= - - - % = 10% (Ans.)
xx4 xx4x5
Alternative method :
Let sum (P) = t 100
7
Amount (A) = - x t 100 = t 140
5
Interest (I) = A - P = t 140 - t 100 = t 40
IX 100 40 X 100 Ofc - 1001c (Ans.)
Rate% = Px T % = 1oo x 4 o - . o

s·
irnp1e Interest - - -- - - -- - - - - - - - - - - - - - - -~
 EXERCISE 11
1. Find the S.I. and the amount on :
(i) f 150 for 4 years at 5% per year.
(ii) f 350 for 3 years at 8% p.a.

(iii) f 620 for 4 months at 8 paise per rupee per month.

(iv) f 3,380 for 30 months at 4 1 % p.a.

2
(v) 600 from July 12 to Dec. 5 at 10% p.a.

(vi) 850 from 10th March to 3rd August at 2 1 % p.a.

2
(vii) 225 for 3 years 9 months at 16% p.a.

2. On what sum of money does the S.I. for 1a years at 5% become f 1,600 ?
3. Find the time in which f 2,000 will amount to f 2,330 at 11 % p.a.
4. In what time will a sum of money double itself at 8% p.a. ?

5. In how many years will t 870 amount to t 1,044, the rate of interest being 2 ¾% p.a
1
6. Find the rate percent, if the S.I. on f 275 in 2 years is f 22.
7. Find the sum which will amount to f 700 in 5 years at 8% p.a.
8. What is the rate of interest, if f 3,750 amounts to f 4,650 in 4 years ?
9. the
In 4same f 6,000
years,rate ? amounts to f 8,000. In what time will f 525 amount to f 700 at

10. The interest on a sum of money at the end of 2-½ years is

the rate percent ?
i- of the sum. What is
11. What sum of money lent out at 5% for 3 years will produce the same interest as
f 900 lent out at 4% for 5 years ?
12. A sum of f 1,780 becomes f 2, 136 in 4 years.
Find : (i) the rate of interest.
(ii) the sum that will become f 810 in 7 years at the same rate of interest.
13. A sum amounts to f 2,652 in 6 years at 5% p.a. simple interest.
Find : (i) the sum
(ii) the time in which the same sum will double itself at the same rate of interest.
14
_p and a invest f 36,000 and f 25,000 respectively ~t the same rate of interest per
year. If at the end of 4 years, P gets f 3,080 more interest than a, find the rate of
interest.
15 sum of money is lent for 5 years at ~% simple interest per annum. If the interest
- earned
A be one-fou rth of the money lent, find the
. value of .R.
16. The s1mp
. Ie in . terest earned on a certain sum m 5 years is 301/o
0
of the sum. Find the
rate of interest.

Concise MATHEMATICS Middle School_ 7