Simple interest = (Principal amount X Time X Rate) / 100
- Principal amount = (Simple interest X 100) / (Time X Rate)
- Rate = (Simple interest X 100) / (Time X Principal amount)
- Time = (Simple interest X 100) / (Principal X Rate)
- Total amount = Principal amount + Interest
Example 1. Calculate the simple interest on 6000 Rs. with 6% interest rate yearly for 2 years?
Answer:720 Rs.
Simple interest = (Principal amount X Time X Rate) / 100
Simple Interest = (6000 X 2 X 6)/100 = 720 Rs.
Example 2.The principal amount is 100 Rs. Difference in interest is for 4 years and 6 years is 8 Rs. Calculate the rate of interest?
Answer: 4%
Let us take interest rate is R
For 4 years: Simple interest = (100 X 4 X R)/100 = 4R
For 6 years: Simple interest = (100 X 6 X R)/100 = 6R
6R-4R=8 Rs, 2R=8, R=4, Rate of interest is 4%
Example 3.With what simple interest rate your money will double in 8 years?
Answer: 12.5 %
Let us take, Principal amount = A, then interest is also = A, Time = 8 Years
Rate = (Simple interest X 100) / (Time X Principal amount)
Rate = (A X 100) / (8 X A) = 12.5%