How To Solve Simple Interest Problems

How To Solve Simple Interest Problems-54
The variable for time, t, represents the number of years the money is left in the account.Definition: simple interest If an amount of money, P, the principal, is invested for a period of t years at an annual interest rate r, the amount of interest, I, earned is $$I = Prt$$ where I = interest P = principal r = rate t = time Interest earned according to this formula is called simple interest.In such problems, the following data is specified Download this article as pdf To solve this kind of problem, we should know the basics of simple interest.

The variable for time, t, represents the number of years the money is left in the account.Definition: simple interest If an amount of money, P, the principal, is invested for a period of t years at an annual interest rate r, the amount of interest, I, earned is $$I = Prt$$ where I = interest P = principal r = rate t = time Interest earned according to this formula is called simple interest.In such problems, the following data is specified Download this article as pdf To solve this kind of problem, we should know the basics of simple interest.

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Solved examples with detailed answer description, explanation are given and it would be easy to understand.

All students, freshers can download Aptitude Simple Interest quiz questions with answers as PDF files and e Books.

In 4 years his brother paid him back the $3,000 plus $660 in interest. Solution We are asked to find the rate of interest, r. This might happen, for instance, in making a car purchase when the dealer adds the cost of a warranty to the price of the car.

In the next example, we will solve a simple interest application for the principal.

So we find the difference in the number of years and the amounts.

The difference in number of years = 6 – 5 = 1 year The difference in amounts = Rs.

Do you know that banks pay you to let them keep your money?

The money you put in the bank is called the principal, P, and the bank pays you interest, I.

The interest is computed as a certain percent of the principal; called the rate of interest, r.

The rate of interest is usually expressed as a percent per year, and is calculated by using the decimal equivalent of the percent.

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