Simple interest Time in Years

Recap Lokesh decides to keep some money in a bank for 1 year. After 1 year , the bank provides him an additional amount which is called interest of Rs 400. He then decides to keep the money in the bank for 1 more year and gets the same interest of Rs 400 for that 1 year. This type of interest where you get same interest every year is called simple interest. In simple interest, the interest amount remains the same because the interest is calculated based on the original principal amount. 

INTEREST When we borrow (or lend) money ,we pay (or receive) some additional amount in addition to the original amount. The additional amount that we receive is termed as Interest (I).

Simple Interest Simple Interest- Interest is termed as Simple Interest because it is always calculated on the initial amount (ie) Principal. Principal (P)- The amount borrowed / lent is called the Principal (P). Rate(R)- Rate of interest is the amount calculated annually for Rs.100 Period of time(n) - mostly expressed in years.

Simple Interest To find simple interest we use the following formula: I = Rate of interest Interest Principal Number of years

Ans: Arun will earn Rs.90 interest in 4 years. Example 1: Arun has Rs.750 in a savings account that pays 3% simple interest. How much interest will he earn in 4 years? Solution: Given : p=750 , n=3 , r = 4 To Find:- simple interest = 90 Ans: Arun will earn Rs.90 interest in 4 years.

Ans: Arun will earn Rs.6000 interest in 10 years. Example 2: Arun has Rs.12000 in a savings account that pays 5% simple interest. How much interest will he earn in 10 years? Solution: Given : p=12000 , n=10 , r = 5 To Find:- simple interest = Rs 6000 Ans: Arun will earn Rs.6000 interest in 10 years.

Try these Find simple interest when rate =5% per annum,principal=Rs 2500 and no of years is 5?