Simple Interest – Concepts, Formulas, Shortcuts & Free PDFs | Wisdom Helps

Simple Interest – Concepts, Shortcuts

 Simple Interest (SI) :-     

                                    Simple Interest (SI) is the interest calculated only on the principal amount 

(the original sum of money borrowed or invested), without considering previously earned interest.
Here We need To mainly about what is Principal Amount, and What is Amount ? Before going to know about these terms first what is interest either simple or compound interest means 
the interest is calculated on certain original amount or barrowed from person or loans from banks 
the Extra money in which we are paying to the recipients. 

Amount : The Combination of Principal Amount and Interest is called Amount 
so the formula we are used here is 
                        Amount = Principal + Interest (here, Simple Interest)

Principal amount:    The Amount that we are borrowing or taking from others for our needs is called the Principal amount or Original Amount 
in real-time exams, they do not directly mention about the principal 
The following are Other Words for Principal 

• Lending money 
• Barrowed 
• Sum of Amount or sum 
  

Interest : The Extra Amount Paid on the Principal amount is called Interest 

Simple Interest Formula :  Final Definition for this: the Interest Calculated only on the Original amount or principal, not on the total  Amount or interest 

in real-time exams, they do not directly mention about the principal 
The following are Other Words for Principal 

• Lending money 
• Barrowed 
• Sum of Amount or sum 

Simple Interest Formula :  Final Definition for this: the Interest Calculated only on the Original amount or principal, not on the total  Amount or interest 

             

Where T is Time Period 
            R is the Rate of Interest 
            P is The Principal 

            

$$ SI = \dfrac{P \times R \times T}{100}$$

here are the some examples on simple interest 

💵A sum of money amounts to ₹4,750 in 2 years and ₹5,250 in 3 years at simple interest. Find the principal.
A) ₹3,000
B) ₹3,250
C) ₹3,500
D) ₹3,750 

Ans : The simple interest for the one-year period between the 2nd and 3rd year is the difference between the amounts at those times.

Interest for 1 year=₹5,250−₹4,750=₹500

Since the interest is simple interest, it remains constant each year. Therefore, the total simple interest accrued over 2 years is:

Interest for 2 years=2×₹500=₹1,000

The principal is the amount after 2 years minus the simple interest for 2 years.

Principal=₹4,750−₹1,000=₹3,750

The principal amount is ₹3,750  

so Correct Option is D

A sum of ₹20,000 is lent at 10% per annum simple interest. After how many years will the interest be equal to the principal?

 A) 8 years

 B) 10 years

 C) 12 years

 D) 15 years 

The Shortcut Method

When the Simple Interest (SI) is equal to the Principal (P), the time taken is simply 100 divided by the Rate of Interest (R).

Sol:  

\[ \textbf{Shortcut Method:} \] \[ \text{When the Simple Interest (SI) is equal to the Principal (P),} \] \[ T = \frac{100}{R} \] \[ \textbf{Given: } R = 10\% \] \[ T = \frac{100}{10} \] \[ T = 10 \ \text{years} \] \[ \therefore \text{The interest will be equal to the principal in 10 years.} \] \[ \boxed{\text{Correct option: B) 10 years}} \]

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