# Simple Interest Shortcut Methods

When a person borrows some money from another person then the borrower has to pay some extra money for the use of that money to the lender. This extra money is called

**Interest.**
In other words, the amount charged by lender for giving his money for a specific amount of time is called

**Interest.**
The amount of money borrowed is known as

*Principle.*
Total of Interest and Principle is known as

**Total Amount**.**Amount = Principle + Interest.**

The borrower has to pay interest according to some percent of principle for the fixed period of time. This percentage is known as Interest Rate. This fixed period may be a year, six months, three months or a month and correspondingly the rate of interest is charged annually, half yearly, quarterly or monthly.

For example, the rate of interest is 10% per annum means the interest payable on Rs 100 for one year is Rs 10.

**Some Basic Formulas**

If A = Amount

P = Principle

I = Interest

T = Time in years

R = Interest Rate Per Year, then

Amount = Principle + Interest

P = Principle

I = Interest

T = Time in years

R = Interest Rate Per Year, then

Amount = Principle + Interest

A = P + I

EXAMPLE:

1. Find the simple interest on Rs 7000 at 50/3 % for 9 months?

**Answer:**

So, by putting the values in the above formula, our result will be.

#### 2. Find the simple interest on the Rs. 2000 at 25/4% per annum for the period from 4th Feb 2005 to 18th April 2005?

**Answer:**

**One thing which is tricky in this question is to calculate the number of days.**

Always remember that the day on which money is deposited is not counted while the day on which money is withdrawn is counted.

So lets calculate the number of days now,

Time = (24+31+18) days = 73/365 years = 1/5 years

P = 2000

R = 25/4%

S.I. = =2000×254×5×100=25

Always remember that the day on which money is deposited is not counted while the day on which money is withdrawn is counted.

So lets calculate the number of days now,

Time = (24+31+18) days = 73/365 years = 1/5 years

P = 2000

R = 25/4%

#### 3. There was simple interest of Rs. 4016.25 on a principal amount at the rate of 9%p.a. in 5 years. Find the principal amount?

**Answer:**

**
**P=S.I.∗100R∗T

So by putting values from our question we can get the answer

P=4016.25∗1009∗5=8925

So by putting values from our question we can get the answer