Simple & Compound Interest • Topic 1 of 4

Simple Interest

Simple interest is SI = PRT/100, where P is principal, R the annual rate, T the time in years. The amount is A = P + SI. Because SI is linear in time, the amount after equal periods grows by equal steps — a handy check. If a sum becomes n times itself in t years at simple interest, then (n - 1) = RT/100.

✅ Solved examples

1. SI on 5000 at 8% for 3 years?
SI = 5000 x 8 x 3 / 100 = 1200.
2. At what rate does 4000 give 720 SI in 3 years?
R = 100 x 720 / (4000 x 3) = 6%.
3. A sum doubles in 8 years at SI. Rate?
Doubling means SI = P, so 1 = R x 8/100 -> R = 12.5%.
4. A sum amounts to 5520 in 3 years and 6000 in 5 years at SI. Find the principal.
Two years interest = 6000 - 5520 = 480, so per year 240. 3-year interest 720; P = 5520 - 720 = 4800.

✏️ Practice — try these, take hints as needed

1. SI on 8000 at 10% for 2 years?
PRT/100.
8000x10x2/100.
—
1600
2. Rate for 6000 to give 900 in 3 years?
100xSI/(PT).
90000/18000.
—
5%
3. Time for 5000 to give 1500 SI at 10%?
100xSI/(PR).
150000/50000.
—
3 years
4. A sum triples in 10 years at SI. Rate?
SI = 2P.
2 = R x 10/100.
—
20%
5. Amount on 2000 at 9% for 4 years?
SI = 720.
A = P + SI.
—
2720

📝 Topic test — 8 questions

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