Examples of Simple Interest

Example 1:
Find the simple interest on Rs. 3000 at a 7% rate of interest for one year.

Solution:
Let Principal = 3000, Rate of interest = 7%, n = 1

Simple interest  = \,\,\,\,\left( {{\text{Principal}}} \right)\left( {{\text{Rate}}} \right)\left( n \right) = \,\,\,\,\left( {3000} \right)\,\,7\% = \,\,\,\,3000 \times \,\frac{7}{{100}} = \,\,\,\,210

Example 2:
Find the simple interest on Rs. 10,000 at the rate of 5% for 5 years. Also find the total amount after this time.

Solution:
Let Principal = 10,000 Rs., Rate = 5%, Time  = n = 5

The amount of simple interest for 5 years is

\begin{gathered} Interest\; = \,\,\,\,\left( {{\text{Principal}}} \right)\left( {{\text{Interest}}} \right)\left( {{\text{Time}}} \right) = \,\,\,\,\left( {10,000} \right)\left( {5\% } \right)\left( 5 \right) \\ Interest\;\; = \,\,\,\,\left( {10,000} \right)\left( {\frac{5}{{100}}} \right)\left( 5 \right)\,\,\,\,\, = 2,500 \\ \end{gathered}

Hence the amount after 5 years {\text{ = Principal}} + {\text{Interest}} = 10,000 + 2,500 = 12,500

Example 3:
Find the simple interest on Rs. 156,00 for 1\frac{1}{2} years at the rate of 5% per annum. Also find the total amount.

Solution:
Let Principal = 15,600, Rate = 5%  = \frac{5}{{100}}  = 0.5, Time = 1\frac{1}{2}years  = \left( {1 + \frac{1}{2}} \right)\,\,{\text{years}}  = \frac{3}{2}\,{\text{years}}

Simple interest for 5 years  = \,\,\,\,\left( {{\text{Principal}}} \right)\left( {{\text{Interest}}} \right)\left( {{\text{Time}}} \right) = \,\,\,\,\left( {15,600} \right)\left( {\frac{5}{{100}}} \right)\left( {\frac{3}{2}} \right) = \,\,\,\,1,170

Amount {\text{ = Principal}} + {\text{Interest}} = {\text{ }}15,600 + 1,170 = \,\,\,\,16,770

Example 4:
Find the simple interest on Rs. 8,000 for 40 days, at 10% per annum.

Solution:
Let Principal = 8,000 Rs., Rate = 10% per annum, Time = 40 days  = \frac{{40\,{\text{years}}}}{{365}}  = \frac{8}{{73}}\,\,{\text{years}}
Simple interest  = \,\,\,\,\left( {{\text{Principal}}} \right)\left( {{\text{Rate}}} \right)\left( n \right) = \,\,\,\,\left( {8,000} \right)\left( {\frac{{10}}{{100}}} \right)\left( {\frac{8}{{73}}} \right) = \frac{{6,400}}{{73}}