Std:VII

SIMPLE INTEREST

What do you observe?

What comes in your mind when you see this picture?

What do we call it in mathematical terms?

imple Interest

We borrow some amount or money from a bank or a money lender

What is simple interest?

This borrowed amount is called as loan. However, at the time of returning the loan to the bank or the money lender we have to pay back an amount somewhat bigger than the loan.

This additional amount is called as

SIMPLE INTEREST.

T = N

1) You want to buy this tractor, It costs Rs.15,000.

You decide to get a five year loan with a 6.5% interest rate for Rs.15,000. How much interest will you pay?

Given

Interest Paid=? Principal(loan amount) = Rs.15,000Rate = 6.5p.c.p.a.Period(N) = 5 years

Solution:

I = P x N x R

100

I = 15000x5x6.5100

= 4,87,500100

=4,875

To buy this tractor we will pay Interest of Rs 4,875

The simple interest on Rs. 45,000 in 3 years is Rs. 13,500. What is the rate of Interest?

Given

o Interest Paid=Rs.13,500

Principal(loan amount) = Rs.45,000

Rate = ?

Period(N) = 3years

Solution:

I = P x N x R

100

13,500 =45000x3xR

100

R = 13500x100

45000x3

=10 p.c.p.a.

The Rate of Interest = 10 p.c.p.a.

A certain sum of money earns an interest of Rs.3,630 in 3 years at the rate of 11 p.c.p.a, what is the principal?

Given

o Interest Paid=Rs.3,630

Principle(loan amount) = ?

Rate = 11p.c.p.a.

Period(N) = 3years

Solution:

I = P x N x R

100

3630 =Px3x11

100

P= 3630x100

11x3

=Rs.11,000

The Principal amount is Rs.11,000

The additional amount paid on a loan amount is called Simple Interest.

The Formula for Simple Interest (S.I.) is:

S.I.= P x R x N

100

Define Simple Interest.

What Is:

P = ?

R= ?

Solve the Following Questions:Sr. No. Principal

Rs.

Rate of

Interest

p.c.p.a.

Number of

years

1 9000 10 3

2 15000 11 2