Shortcut - Simple Interest
Simple Interest:
Simple interest =$\dfrac{PNR}{100}$
P = Principle amount invested or borrowed
R = Rate of interest per term
N = Number of terms
Term = duration for which interest is calculated
Question:
A man invested Rs. 10000 at 4% per annum simple interest.
1. What is the interest he will get at the end of 3 years?
2. What is the total amount earned after 3 years?
Answer:
P = 10000;
N = 3;
R = 4
Substitute the values in the above equation, we get
SI = 10000 x 3 x 4/100
= 1200
Amount = Principle + Interest
Amount = 10000 + 1200 = 11200
Conversion of Time Period -Rate of interest:
Some Tricks to solve easily :
Trick 1:If a sum of moey becomes "n" times in "T years" at simple interest ,then the rate of interest per annum can be given be
R=$\dfrac{100(n-1)}{T}$
Question:
If a sum of money Rs.50,000 becomes 3 times increases in 2 years at simple interest ,then find the rate of interest per annum.
Answer: Formula: R=$\dfrac{100(n-1)}{T}$Therefore,
R=$\dfrac{100(3-1)}{2}$
=$\dfrac{100 \times 2}{2}$
=100%
If an amount P1 is lent out at simple interest of R1 % per annum and another amount P2 at simple interest rate of R2% per annum .then the rate of interest for the whole sum can be given by
R=$\dfrac{P1R1+P2R2}{P1+P2}$
A sum of money at simple interest n1 itself in t1 year.It will become n2 times of itself in(If rate is constant)
$\dfrac{t1}{t2}=\dfrac{(n1-1)}{(n2-21}$
In what time will the simple interest be "n" of the principal at r% per annum:
$rt=n \times 100$
If a certain sum of money is lent out in n parts in such a manner that equal sum of money is obtained at simple interest on each part where interset rates are R1,R2,...Rn respectively and time periods are T1,T2,...Tn respectively ,then the ratio in which the sum will be divided in n parts can be given by
$\dfrac{1}{R1T1}$:$\dfrac{1}{R2T2}$:.......$\dfrac{1}{RnTn}$