Simple Interest Notes for SSC Exams

Simple Interest is a short and easy chapter in SSC Quantitative Aptitude, and it is also the base of compound interest. One or two questions come from it in most exams, and they can be solved in under a minute if you know the formula and the doubling and tripling tricks. These simple interest notes for SSC explain everything with tables, examples and practice questions.

What Is Simple Interest?

When you lend or borrow money, the extra money paid for using it is called interest. In simple interest, the interest is calculated only on the original amount (principal) for the whole time. It does not grow on the earlier interest.

• Principal (P): the money borrowed or lent.
• Rate (R): the interest per 100 rupees per year, written as % per annum.
• Time (T): the period for which the money is used, always converted into years.
• Amount (A) = Principal + Simple Interest.

Simple Interest Formulas

Converting Time Into Years

Always convert months and days into years before putting the value in the formula. For days, divide by 365 (or 366 in a leap year if the question says so).

Doubling, Tripling and Multiplying Tricks

If a sum becomes n times of itself in T years, then the interest earned is (n - 1) times the principal. So R x T = (n - 1) x 100. For doubling, R x T = 100, and for tripling, R x T = 200. For example, a sum that doubles in 8 years has R = 100 / 8 = 12.5%, and a sum that triples at 10% needs T = 200 / 10 = 20 years.

Solved Examples

Example 1: Find the simple interest on Rs 5,000 at 8% per annum for 3 years. Also find the amount.
Solution: SI = 5000 x 8 x 3 / 100 = Rs 1,200. Amount = 5000 + 1200 = Rs 6,200.

Example 2: The simple interest on Rs 2,500 at 6% per annum is Rs 900. Find the time.
Solution: T = SI x 100 / (P x R) = 900 x 100 / (2500 x 6) = 6 years.

Example 3: A sum of money doubles itself in 8 years at simple interest. Find the rate of interest.
Solution: R = 100 / T = 100 / 8 = 12.5% per annum.

Example 4: At what rate will a sum of money become three times in 16 years?
Solution: R x T = (3 - 1) x 100 = 200, so R = 200 / 16 = 12.5% per annum.

Example 5: Find the simple interest on Rs 8,000 at 7.5% per annum for 2 years 6 months.
Solution: Time = 2.5 years. SI = 8000 x 7.5 x 2.5 / 100 = Rs 1,500.

Example 6: A man borrows Rs 10,000 at 8% per annum and lends it at 11% per annum for 3 years. Find his gain.
Solution: Gain = 10000 x 3 x (11 - 8) / 100 = Rs 900.

Quick Tips to Solve Faster

• Always convert the time into years and the rate into per annum before using the formula.
• Use R x T = (n - 1) x 100 for any "becomes n times" question.
• For two lenders or two rates, work with the difference of the rates instead of finding both interests.
• If the amount is given, find the interest first by subtracting the principal.
• For days, divide by 365, and many SSC numbers are chosen so that 73 days = 0.2 years.

Common Mistakes to Avoid

• Using months or days directly in place of years.
• Forgetting to add the principal when the question asks for the amount.
• Mixing up the formulas for rate and time.
• Applying the compound interest formula in a simple interest question.
• Using R x T = n x 100 instead of (n - 1) x 100 for "becomes n times".

Quick Revision Points

• SI = P x R x T / 100.
• Amount = Principal + SI.
• Sum doubles: R x T = 100. Sum triples: R x T = 200.
• Time must always be in years.
• Simple interest is the same every year, which is why it is called simple.

Practice Questions With Answers

1. Find the simple interest on Rs 6,000 at 5% per annum for 4 years.
   Answer: Rs 1,200 (6000 x 5 x 4 / 100).
2. What principal earns Rs 840 as simple interest in 3 years at 7% per annum?
   Answer: Rs 4,000 (840 x 100 / (3 x 7)).
3. Rs 4,000 becomes Rs 5,200 in 5 years at simple interest. Find the rate.
   Answer: 6% (SI = 1200, R = 1200 x 100 / (4000 x 5)).
4. In how many years will Rs 5,000 become Rs 6,500 at 10% per annum?
   Answer: 3 years (SI = 1500, T = 1500 x 100 / (5000 x 10)).
5. A sum doubles in 5 years at simple interest. What is the rate?
   Answer: 20% (100 / 5).
6. Find the simple interest on Rs 3,000 at 10% per annum for 73 days.
   Answer: Rs 60 (73 days = 0.2 years).
7. Find the simple interest on Rs 12,000 at 8% per annum for 9 months.
   Answer: Rs 720 (12000 x 8 x 0.75 / 100).
8. A sum becomes four times in 15 years at simple interest. Find the rate.
   Answer: 20% (R x 15 = 300).
9. After 2 years at 10% simple interest, a sum becomes Rs 6,000. Find the sum.
   Answer: Rs 5,000 (6000 / 1.2).
10. Find the difference between the simple interest on Rs 5,000 for 3 years at 8% and at 6% per annum.
    Answer: Rs 300 (5000 x 3 x 2 / 100).

How to Practise This Chapter

1. Learn the formulas in the table until you can write them without looking.
2. Solve the solved examples again on your own, without reading the solution.
3. Attempt the practice questions above with a timer of 10 minutes.
4. Solve the matching practice papers to test yourself in exam style.
5. Check the previous year papers to see how SSC frames this topic.

Related Notes and Practice Papers

• Compound Interest Notes
• Percentage Notes
• Profit and Loss Notes
• Ratio and Proportion Notes
• SSC Percentage Practice Paper

Explore More SSC Subjects

SSC exams test many subjects, so connect this topic with the related subjects below:

• Reasoning Notes
• Statistics Notes
• Indian Economy Notes
• English Notes
• General Awareness Notes
• All SSC subjects and notes

Frequently Asked Questions

What is simple interest?

Simple interest is the interest calculated only on the original principal for the whole period. It does not include interest on interest.

What is the simple interest formula?

SI = P x R x T / 100, where P is the principal, R is the rate per annum and T is the time in years.

How many questions come from simple interest in SSC exams?

One or two questions usually come from simple interest, and it is also needed to understand compound interest.

How do I find the amount in simple interest?

Amount = Principal + Simple interest, or A = P (1 + RT/100).

What is the doubling rule in simple interest?

If a sum doubles in T years, then R x T = 100, so the rate is 100 / T percent.

How do I convert months into years?

Divide the number of months by 12. For example, 9 months = 9 / 12 = 0.75 years.

What is the difference between simple and compound interest?

In simple interest the interest is calculated on the principal only. In compound interest it is calculated on the principal plus the earlier interest.

Can the rate be given in months?

Sometimes the rate is given per month. Convert it into a yearly rate by multiplying by 12 before using the formula.

How should I practise simple interest?

Learn the formula, solve the examples and practice questions given in these notes, and then attempt previous year questions.