Concepts Of Simple Interest


Simple interest concepts also helps in solving the problems related to that of compound interest also. All questions based on Simple interest can be solved using only one basic formula.

simple interest

Some Important Terms In Simple Interest


It is the borrowed money and is denoted by P.

Interest or Simple Interest

The additional amount paid for only borrowed money is Interest and is represented by I or SI


Money is borrowed for a certain time period, this time period is taken as interest time and is denoted by T or t.


Principle along with SI becomes amount and is denoted by A.
Amount =Principle + SI


It is the amount charged on principle by the lender for using the money.

Basic Formulas Of Simple Interest Concepts

SI \ =\dfrac {Principle\times Time\times Rate}{100} \\ \\ =\dfrac {P\times T\times R}{100}


  • If SI is payable half-yearly then,
    consider the rate of SI as half and time as twice
  • If SI is payable quarterly then, consider R=R/4 and T=4 times

Some Important Formulas in Concepts of Simple Interest

  • If SI is n times of principle then RT=(n-1) x 100.
  • If an amount is n times of certain sum then RT=(n-1) x 100
  • If there are different rates R1%,R2%, R3%…..for different time periods t1,t2,t3……then,

\begin{align*} SI=\dfrac {P\left( R_{1}t_{1}+R_{2}t_{2}+R_{3}t_{3}+\ldots \right) }{100}

  • The difference between two SI for a sum of P1, time period T1 at rate R1 and another sum P2, time period T2, rate R3 is \begin{align*}
    SI =\dfrac {P_{2}T_{2}R_{2}-P_{1}T_{1}R_{1}}{100} \end{align*}
  • When difference between two SI at different rates and times is given as x then,
    Principle (P) is

\dfrac {x\times 100}{\begin{pmatrix}
Difference \\ in \ rate \end{pmatrix} \times \begin{pmatrix} Difference \\ in \ time

  • If a principle amounts to x1 in t years at some rate and the resultant new sum now as principle amounts to x2 in t years at another rate then 

Principle ( P) is

\dfrac {\begin{pmatrix}
Difference \\ in \ amount\end{pmatrix}\times 100}
Difference \\ in \ SI \ rate \end{pmatrix} \times t}

Read More: Simple Interest Questions



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