21 CHAP - 21. SIMPLE INTEREST IMPORTANT FACTS AND FORMULAE...

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21. SIMPLE INTEREST IMPORTANT FACTS AND FORMULAE 1.. Principal : The money borrowed or lent out for a certain period is called the principal or the sum. 2 . Interest : Extra money paid for using other's money is called interest. 3. Simple Interest (S.I.) : If the interest on a sum borrowed for a certain period is reckoned uniformly, then it is called simple interest. Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then, (i) S.I. = (P*R*T )/100 (ii) P=(100*S.I)/(R*T) ;R=(100*S.I)/(P*T) and T=(100*S.I)/(P*R) SOLVED EXAMPLES Ex. 1 . Find the simple interest on Rs. 68,000 at 16 2/3% per annum for 9 months. Sol. P = Rs.68000,R = 50/3% p.a and T = 9/12 years = 3/4years. S.I. = (P*R*T)/100 = Rs. ( 68,000*(50/3)*(3/4)*(1/100) ) = Rs.8500 Ex. 2. Find the simple interest on Rs. 3000 at 6 1/4% per annum for the period from 4th Feb., 2005 to 18th April, 2005. Sol. Time = (24+31+18)days = 73 days = 73/365 years = 1/5 years. P = Rs.3000 and R = 6 ¼ %p.a = 25/4%p.a S.I. = Rs. ( 3,000*(25/4)*(1/5)*(1/100) ) = Rs.37.50. Remark : The day on which money is deposited is not counted while the day on which
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21 CHAP - 21. SIMPLE INTEREST IMPORTANT FACTS AND FORMULAE...

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