# CLASS-9SIMPLE INTEREST

Simple Interest

When money is borrowed on simple interest, then the interest is calculated uniformly on the original principal throughout the loan period. The money borrowed or lent out for a certain period is called the principal or the sum. Extra money paid for using others' money is called interest. The sum of principal and interest after a specified period is called the amount. Interest on \$100 for 1 year is called the rate percent per annum. The period for which money is borrowed is called the time

Principal = P, Rate = R % per annum and Time = T years,

P X R X T

then simple interest (S.I) = -------------

100

Example.1) Find the simple interest on \$ 15000 for 3 years at 10% per annum.

Ans.) Given, Principal (P) = \$ 15000, Rate (R) = 10 % per annum and Time (T) = 3 years,

P X R X T        15000 X 10 X 3

Then simple interest (S.I) = ------------ = -----------------

100                  100

=   \$ 4500

So, the obtained simple interest is \$ 4500              (Ans.)

Example.2) Find the amount and the simple interest on \$ 20000 for 5 years at 15% per annum.

Ans.) Given, Principal (P) = \$ 20000, Rate (R) = 15 % per annum and Time (T) = 5 years,

P X R X T          20000 X 15 X 5

Then simple interest (S.I) = -------------- = -----------------

100                    100

\$ 15000

Amount or sum = \$ ( 20000 + 15000 ) = \$ 35000

So, the obtained simple interest (S.I) is \$ 15000 and amount (A) is \$ 35000          (Ans.)