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Simple Interest
☼ Important Points On Simple Interest :
■ Principal ( or Sum or Capital ) : The money lent out or borrowed for a certain period is called the principal or the sum.
■ Interest : Extra money paid for using other’s money is called interest.
■ Simple Interest ( S.I. ) : If the interest on a sum borrowed for a certain period is reckoned uniformly ( interest of every year is constant ), then it is called simple interest.
■ Amount ( A ) = Principal ( P ) + Interest ( I )
S.I. or I =
Where, P = Principal ( or Sum )
A = Amount ( = P + I )
R = Rate of Interest
I = Interest
N = No. of years
To understand above formula, remember PARIN sir.
e.g. Find the interest on Rs. 1600 at 9 % per annum for 3 years and 5 months.
Soln. Here, P = Rs. 1600, R = 9 and N = 3 + =
Here, I =
= = Rs. 492
