Introduction
Simple Interest is interest calculated only on the original principal, and stays constant every year — unlike
Compound Interest, which grows on itself. SI questions are usually the easier, faster-scoring half of the
Interest topic pair.
Core Formula
SI = (P × R × T) / 100, where P = Principal, R = Rate % per annum, T = Time in years.
Amount (A) = P + SI
Q. Find the SI on ₹12,000 at 8% per annum for 3 years.
SI = (12000 × 8 × 3) / 100 = ₹2,880. Amount = 12000 + 2880 = ₹14,880.
Q. A sum triples itself in 8 years at simple interest. Find the rate of interest.
Let P = 100. Amount = 300, so SI = 200 over 8 years.
Using SI = (P×R×T)/100: 200 = (100×R×8)/100 → 200 = 8R → R = 25%.
Useful Shortcuts
- If a sum becomes "n times" itself in T years at SI, then Rate = [(n−1) × 100] / T.
- SI is the same every year — so if you know SI for 1 year, multiply directly by the number of years.
- For two different rates applied to two different time periods on the same principal, calculate each year's SI separately and add.
⚠️ Key Insight: In SI, time must be in years — for months, convert using T = (number of
months)/12. Missing this conversion is a common calculation trap.
✅ Practice Focus: Direct SI/Amount calculation · "Sum becomes n times" rate problems ·
Comparing SI at different rates for split time periods.