Simple Interest And Compound Interest Tips & Tricks

Simple Interest And Compound Interest Tips & Tricks

What is Principle?
The money borrowed for a certain time period called Principle or Sum.
 

What is Amount?
The Addition of Simple Interest and Principle is called the Amount.
 

A = S.I + P ( Principle ).
 

S.I = A ( Amount ) – P ( Principle ).
 

What is Per annul means?
Per annul means For a year.

P = Principle
R = Rate of per annul
T = Number of years

When we Add Simple Interest into Principle.It becomes into Amount.
Formulas Need to Remember
S.I =( P X R X T / 100 ).
Here, P = Principle.
R = Rate per annul.
T = Number of years.
Formula:
In case S.I ( Simple Interest ), T ( Number of years ) and R (Rate per annul ) are given in Question then we can easily find the Principle or Sum.
P = ( S.I X 100 / R X T ).

Formula:
In case S.I ( Simple Interest ), T ( Number of years ) and P ( Principle ) are given in question then we can easily find the R (Rate per annul ).
R = ( S.I X 100 / P X T ).

Example 1:
Find the simple interest on Rs 500 for 5 years at 5 per cent ?

Answer :
SI = 500 x 5 x 5 / 100
Simple interest in 5 years is Rs 125 .

 

Find Simple interest based question

Formula : S.I = (P X R X T / 100)

Example 1 :
On amount of 7530 at the rate of 18 p.c.p.a for 6 years What will be the simple interest ?
 

Answer :
S.I = PRT / 100
S.I = 7530 x 18 x 6 / 100
S.I = 8132.40
So the simple interest is 8132.40.

Example 2: Find the Simple Interest on Rs. 40000 at 25 / 4 % per annul for the period from 4th January, 2013 to 18th march, 2013.
 

Answer:
Step 1: First we calculate the period of time taken that is = January = (31 – 4) = 27 days, February = 28 days, March = 18 day. Add all together ( 27 + 28 + 18 ) = 73 / 365 year = 1 / 5 years.

Step 2: we know Principle P = 40000, and R = 25 / 4 % p.a.

Step 3: S.I = Rs. ( 40000 X 25 X 1 X 1 / 4 X 100 X 5 ) = Rs. 500
So the S.I is 500.

Example 3 :
What will be the Ration of the Simple interest earned by certain amount at the same rate of interest for 5 years and 7 years ?
 

Answer :
step 1: Let Principle P and Rate of interest be R %.
So Required interest of 5 years is S.I = PRT / 100 = P x R x 5 / 100 = 5PR / 100.
Required interest of 7 years is S.I = PRT / 100 = P x R x 7 / 100 = 7PR / 100.

Step 2: Required ration is = 5PR / 7PR = 5 / 7 = 5 : 7.
So Required Ration is 5 : 7.

Find The rate % based question

Example 1:
What is the rate of p.c.p.a ? If the simple interest accrued on amount of Rs.25500 at the end of 3 years is 9180.
 

Answer :
we know the formula is S.I = PRT / 100
So, S.I = 9180 , P = 25500 , T = 3 years , R = ?
9180 = 25500 x R x 3 / 100
R = 9180 / 765 =  12 %
So rate of p.c.p.a = 12 %

Example 2:
At what rate percent annul will a sum of money double in a 4 years.
 

Answer :
Let Principle is = P.Then S.I = P and Time = 4 years.
S.I. = ( PRT/100 ).
So, R = ( 100X P / P X T ) %.
R = 25%

Find Principle or Sum based question

Example 1: 
Samar take a sum from Anup at simple interest at 25x / 2 per annul and amounts toRs.3202.50after 6 years.Find the Sum or Principle taken by Samar from Anup .
 

Answer :
First We consider sum is x and Rate percent is 25x / 2 and Time is 6 years, So
Step 1:Then  S.I. = Rs. P X R X T / 100 = 3x / 4.
 

Step 2: Amount = Sum + Simple Interest = x + 3x / 4 = 7x / 4.
 

Step 3: 7x / 4 = 3202.50 and x = 3202.50 X 4 / 7 = 1830.
Samar taken sum from Anup is 1830.
 

Example 2:
Suresh take a sum of money at simple interest amounts to Rs.985 in 2 years and to Rs. 885 in 3 yearsfind The sum of money suresh was taken.

Answer :
Step 1: Simple interest in 1 year is = Rs.( 985 – 885 ) = 100.
 

Step 2: Simple Interest in 2 years = Rs.100 X 2 = 200.
 

Step 3: So, Principle = ( 985 – 200 ) = 785.