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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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 Spring '11
 vinh

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