Table of Contents
- Calculation of Simple Interest
- Factors on which the Amount Depends
- Summary
- What’s Next?
In the previous segment, we had a look at Simple interest. In this segment of the chapter
‘Comparing Quantities’, we will learn how to calculate simple interest.
How to Calculate simple interest?
Simple interest can be calculated by the formula,
Simple interest = Principal x Rate of interest x Number of Year. For example,
Q. A man deposits ₹ 100 in a bank at a rate of 10% per annum. So what will be the amount received if the man keeps the money for one year, two years, and three years at the bank?
Solution:
Principal (Initial amount) = ₹ 100
Rate of Interest = 10% per annum
The interest amount is calculated on the original Principal only.
Simple interest for Year 1 = Principal x Rate of interest x Number of Year
= 100 × 10 × 1= ₹ 110
100
Simple interest for Year 2 = Principal x Rate of interest x Number of Year
= 100 × 10 × 2 = ₹ 120
100
Simple interest for Year 3 = Principal x Rate of interest x Number of Year
= 100 × 10 × 3 = ₹ 130
100
Related content
| Simple Interest – Example 1 |
| Compound Interest |
