Example 1
What is the simple interest on ₹1000 at 5% a year for 2 years?
- Simple interest = P × R × T ÷ 100
- = 1000 × 5 × 2 ÷ 100
- = ₹100
Answer: ₹100
Simple Interest Questions and Formula
Simple interest made clear: the formula, the amount after interest and the rate from the amount, with step-by-step worked examples and free practice.
How to solve simple interest questions
Simple interest
Simple interest = principal × rate × years ÷ 100. The interest is the same every year.
Amount after simple interest
Find the interest as principal × rate × years ÷ 100, then add it to the principal to get the amount.
Rate from the amount
Interest = amount − principal. Rate per year = interest × 100 ÷ (principal × years).
Worked examples
Example 2
What amount does ₹600 grow to in 2 years at 10% a year simple interest?
- Interest = P × R × T ÷ 100 = 600 × 10 × 2 ÷ 100 = ₹120
- Amount = principal + interest = 600 + 120
- = ₹720
Answer: ₹720
Example 3
A sum of ₹2000 grows to ₹2400 in 2 years at simple interest. What is the rate of interest per year?
- Interest = 2400 − 2000 = ₹400
- Rate = 400 × 100 ÷ (2000 × 2) = 40000 ÷ 4000
- = 10% a year
Answer: 10%