This is equal to Rs 120. So, P = (120x100)/6x2 = Rs 1000.

Therefore, P:Q = 15x4/10x4 = 3:2.The total sum of Rs. 8000 is to be divided in the ratio of 3:2. This way the first sum is 8000x3/5 = Rs. 4800.

He earns an interest of Rs. 0.14 3000 = Rs. 420 in US – 64.Total interest income = 80 + 420 = 500.

→Total principal = Rs. 5000. So, the rate on total amount = 100 × 500/5000 = 10 %.

Must Read Simple Interest Articles

- Simple Interest: Theory & Concepts
- Simple Interest: Solved Examples

Therefore, Interest = Amount – Principal = Rs. 200 – Rs. 100 = Rs. 100. Rate = 20%.

Using the formula S.I. × 100 = P × R × T and putting the values in this formula, we get

100 × 100 = 100 × 20 × T → T = 5 years.

- Sometimes instead of interest, the amount is given, then either you add the above simple interest formula in the principal again and then solve the equation or apply the following straight formula.

Principal = 3900x100/100+(15x2) = 3900x100/130 = 3000

Hence, Principal = Rs. 3000.

- Sometimes, the amount is given, but instead of principal, the simple interest is asked in the question which can be calculated with the help of the following straight formula

The above-mentioned principal is also called ‘present worth’ of the amount. Similarly, the simple interest is also called ‘true discount’ on the amount.

Simple Interest = 9600x10+2/100+(10x2) = 9600x10x2/120 = 1600

On subtracting, S.I. for 3 years = Rs. 675 – Rs. 630 = Rs. 45. therefore, S.I. for 1 year = Rs. 45/3 = Rs. 15

therefore, S.I for 2 years = Rs. 15 × 2 = Rs. 30. therefore, P = Rs. 630 – Rs. 30 = Rs. 600.

Using the formula S.I. × 100 = P × R × T and putting the values in this formula, you get 30 × 100 = 600 × 2 × R → R = 2.5% p.a.

The first installment will be paid one year from now i.e. 4 years before it is due.

The second installment will be paid two years from now i.e. 3 years before it is due.

The third installment will be paid 2 years before it is due.

The fourth installment will be paid 1 year before it is due.

The fifth installment will be paid on the day the amount is due.

So, on the first installment, the interest will be paid for 4 years, on the second for 3 years, on the third for 2

years, on the fourth for 1 year and on the fifth for 0 year.

In total, an interest for 10 years will be paid (4 + 3 + 2 + 1 + 0) on Rs. 100 @ 9 %.

Interest = 100x10x9/100 = Rs. 90 and the principal is Rs 100 × 5 = Rs. 500.

The total loan that can be discharged is Rs. 500 + 90 = Rs. 590.

Here, Chain Rule will be applied. i.e. for Rs. 590 the installment required is Rs. 100, for Rs. 5900 the installment required is 5900 × 100/590 = Rs. 1000.

Otherwise the following straight method can also be applied, where the annual installment required is equal to =