How to Solve Simple Interest Questions? Tips & Tricks

By Gaurav Singh Bhadouria|Updated : October 1st, 2019

Simple interest is an important topic which is asked widely in Arithmetic and Data Sufficiency. Here, we are providing you with some Important Short Tricks on Simple Interest Questions which are usually asked in Bank Exams. Use these given short tricks to solve questions in the minimum possible time. Bear in mind that these shortcuts will be very helpful in all the upcoming Bank Exams 2019.

Simple Interest (SI)

If the interest on a sum borrowed for a certain period is calculated uniformly, it is called simple interest(SI). (fix percentage of principal)

What is Principal (sum)

Principal (or the sum) is the money borrowed or lent out for a certain period. It is denoted by P.

What is the Amount?

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

A = S.I + P ( Principle )

Interest

Interest is the extra money paid by the borrower to the owner (lender) as a form of compensation for the use of the money borrowed calculated on the basis of Principle.

Time

This is the duration for which money is lent/borrowed.

Rate of Interest

It is the rate at which the interest is charged on principal.

What is Per annum means?

"Rate of interest R%  per annum" means that the interest for one year on a sum. If not stated explicitly, the rate of interest is assumed to be for one year.

Formulas Need to Remember

S.I =[( P X R X T )/( 100 )].

Where P = Principle, R = Rate of interest per annum, T = Number of years

From the above formula, we can derive the followings

P=(100×SI)/ RT

R=(100×SI)/ PT

T=(100×SI)/ PR

Some Tricks to Solve easily

Trick 1:- If a sum of money becomes “n” times in “T years” at simple interest, then the rate of interest per annum can be given be

Trick 2:- If an amount P1 is lent out at simple interest of R1% per annum and another amount P2 at simple interest rate of R2% per annum, then the rate of interest for the whole sum can be given by

Trick 3:- A sum of money at simple interest n1 itself in t1 year. It will become n2 times of itself in (If Rate is constant)

Trick 4:- In what time will the simple interest be “n” of the principal at “r %” per annum:-

rt =n x 100

 Trick 5:- If a certain sum of money is lent out in n parts in such a manner that equal sum of money is obtained at simple interest on each part where interest rates are R1, R2, ... , Rn respectively and time periods are T1, T2, ... , Tn respectively, then the ratio in which the sum will be divided in n parts can be given by

Some Important examples based on Simple Interest.

Example 1: A sum amounts to Rs. 702 in 2 years and Rs. 783 in 3 years. Calculate the sum, rate of interest and the amount after 5 years?

Solution:
Amount for 2 years(A2) = 702
Amount for 3 years (A3)= 783
Interest for 1 year (I) = 783-702 = 81
So Sum = A2 – 2I = 702 – 2×81
              = 702-162 = 540
rate of interest = (81/540)×100
                             = 15%
Amount after 5 years = Sum+5I
                                    = 540+ 5×81
                                    = 945

Example6: A sum of money doubles itself in 3 yrs at simple interest. In how many yrs will it amount to 8 times itself?

Solution: Doubles in 3 yrs
 3 times in 3× 2 = 6yrs
4 times in 3× 3 = 9yrs
8 times in 3× 7 = 21yrs

Example7: Atul and Vijay are friends. Atul borrowed a sum of Rs.400 at 5% per annum simple interest from Vijay. He returns the amount with interest after 2 yrs. Vijay returns to Atul 2% of the total amount returned. How much did Atul receive?

Solution: After 2 yrs, amount returned to Vijay = 400+ (400*5*2)/100 = Rs 440
Amount returned to Atul = 2% of 440 = 8.8

 

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