Simple Interest — Master File
SIMPLE INTEREST
The Complete Exam-Ready Master File
Notes • Tricks • Question-Type Map • PYQ-style Practice
How to use this file
• Part A is your concept + trick reference — read once, then skim before every exam.
• Part B is organized strictly by question TYPE, the way exams actually test this topic.
• Each type includes: how to spot it, the formula, a worked PYQ-style example, and a trap to
avoid.
• Part C is a rapid-fire practice set with an answer key for self-testing.
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Simple Interest — Master File
Table of Contents
TOC \h \o "1-2"
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Simple Interest — Master File
Part A — Concept & Formula Reference
A.1 The core idea in one line
Simple Interest is rent charged on borrowed money, calculated only on the original sum
(Principal), every single year, never on previously earned interest.
A.2 The master formula
SI = (P × R × T) / 100
A = P + SI = P (1 + RT/100)
P = Principal R = Rate per annum (%) T = Time in years A = Amount SI = Simple Interest
A.3 Rearranged forms (the SI triangle)
To find Formula
Principal (P) P = (SI × 100) / (R × T)
Rate (R) R = (SI × 100) / (P × T)
Time (T) T = (SI × 100) / (P × R)
A.4 Units — the #1 mark-losing trap
• R and T must always be in the SAME time unit (both years, or both months).
• Months → years: divide by 12. Weeks → years: divide by 52.
• Days → years: divide by 365 (ordinary year) or 366 (leap year, only if stated/implied).
• Convention for day-counting: exclude the day money is given, include the day it's
repaid.
Trap alert
• 8 months is NOT 0.8 years — it's 8/12 = 2/3 year. A huge number of silly mistakes come
from rounding months incorrectly.
• If a question gives a MONTHLY rate, either convert the rate ×12 to annual, or keep T in
months too — never mix units.
A.5 SI vs CI — how to instantly tell them apart
Clue in the question It's testing
Interest amount mentioned is the same every year Simple Interest
"Compounded annually / half-yearly / quarterly" Compound Interest
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Clue in the question It's testing
Interest is calculated only on the original sum Simple Interest
Interest is added back before recalculating next year Compound Interest
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Part B — Question Types Asked in Exams (with PYQ-style
examples)
Every Simple Interest question in competitive exams falls into one of five recurring
types below. Learn to spot the TYPE first — the solving method follows automatically.
Type 1 — Direct / Basic (find SI or Amount)
Spot it by:
• P, R, and T are all given directly in the question.
• Asked to find SI, Amount, or sometimes the difference between SI and CI for 2-3
SI = PRT/100, A = P + SI
years.
Worked PYQ-style example
Q: Find the simple interest on ₹15,000 at 9% per annum for 2 years 4 months.
1. Convert time: 4 months = 4/12 = 1/3 year, so T = 7/3 years.
2. Apply formula: SI = (15000 × 9 × 7/3) / 100.
3. Simplify: 15000 × 9 = 135000; 135000 × 7/3 = 315000; ÷100 = 3150.
Answer: ₹3,150
Trick for this type
• Use the building-block percentage method instead of long multiplication: 10% of P, then
5%, then 1%, and add up to reach any rate quickly (covered fully in Part D below).
Type 2 — Reverse-Find (given Amount/SI, find P, R, or T)
Spot it by:
• The question gives you the Amount (or two different Amounts at two different times)
and asks for P, R, or T.
• Keywords: "amounts to", "becomes", "in how many years will it become".
Sub-type 2A — Amount known at two different times
Key insight: the DIFFERENCE between the two amounts equals the interest earned
only for the extra years in between — the principal portion is identical in both.
Q: A sum amounts to ₹6,200 in 2 years and ₹7,400 in 5 years at SI. Find Principal
and Rate.
1. Interest for the extra (5−2)=3 years = 7400 − 6200 = ₹1,200.
2. Interest per year = 1200/3 = ₹400.
3. Interest for first 2 years = 400 × 2 = ₹800, so P = 6200 − 800 = ₹5,000.
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4. R = (400 × 100)/(5000 × 1) = 8%.
Answer: P = ₹5,000, R = 8%
Sub-type 2B — "Sum becomes n times itself"
Q: A sum becomes 5 times itself in 16 years at SI. In how many years will it
become 8 times itself at the same rate?
1. Use the shortcut: R × T = (n − 1) × 100. For n=5, T=16: R × 16 = 400, so R = 25%.
2. For n=8 at the same R: 25 × T = (8−1)×100 = 700, so T = 28 years.
Answer: 28 years
Why this works
• In 'n times' problems, SI = (n-1)P. The Principal P cancels out of the equation entirely —
only the multiple (n) and the rate/time matter. Never waste time trying to find the actual
principal in these questions.
Type 3 — Comparative / Change in Rate or Time
Spot it by:
• Phrases like "had the rate been x% more/less", "the interest would have been ₹Y
more/less".
Δ SI = (P × Δ R × T) / 100
• Two hypothetical scenarios being compared, asking you to find P or the original rate.
Q: If the rate of interest had been 2% more, a sum would have fetched ₹600 more
interest over 4 years. Find the sum.
1. Only the CHANGE matters — set up: 600 = (P × 2 × 4)/100.
2. 600 = 8P/100, so P = 7,500.
Answer: ₹7,500
Trap alert
• You do NOT need the original rate to solve this type — students often hunt for it and waste
time. Only the difference in rate (or time) and the difference in interest matter.
Type 4 — Split Principal (equal interest / equal amount)
Spot it by:
• "Divided into 2 or 3 parts", "invested at different rates", "such that interest from each is
equal".
Sub-type 4A — Equal interest, different rates/times
P1 R1 T1 = P2 R2 T2 → P1 : P2 = R2T2 : R1T1
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Q: ₹6,200 is divided into 3 parts so that interest on part 1 for 4 yrs at 5%, part 2
for 6 yrs at 4%, and part 3 for 8 yrs at 3% are all equal. Find the parts.
1. Set up equality: P1(5)(4) = P2(4)(6) = P3(3)(8), i.e. 20P1 = 24P2 = 24P3.
2. This gives P2 = P3, and P1:P2 = 24:20 = 6:5. So P1:P2:P3 = 6:5:5 (16 parts total).
3. Each part = 6200/16 = 387.5. So P1 = 6×387.5 = ₹2,325; P2 = P3 = 5×387.5 =
₹1,937.50.
Answer: ₹2,325, ₹1,937.50, ₹1,937.50
Sub-type 4B — Equal Amount after different times
When parts must yield the SAME amount after different time periods at the same rate,
the parts are inversely proportional to their growth factor (1 + RT/100).
Type 5 — Installments (discharging a debt under SI)
Spot it by:
P = nx − [x × R × n(n−1)] / 200
• "Equal annual installments", "clears the debt in n years", "loan repaid in installments".
Where x = value of each installment, n = number of installments, R = rate per annum.
Q: A borrows a sum to be repaid in 4 equal annual installments of ₹1,200 each at
5% SI per annum. Find the borrowed sum.
1. Apply: P = nx − [xRn(n−1)]/200 = 4(1200) − [1200×5×4×3]/200.
2. = 4800 − [72000]/200 = 4800 − 360 = 4,440.
Answer: ₹4,440
Why the formula looks like this
• Each installment 'blocks' the lender from charging interest on it for the remaining years.
Installment 1 blocks (n-1) years of interest, installment 2 blocks (n-2), and so on down to 0
for the last. Summing 0+1+...+(n-1) gives n(n-1)/2, the arithmetic series at the heart of this
formula.
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Part C — Shortcut & Mental Math Cheat Sheet
C.1 Quick-fire formula table
Scenario Shortcut
Sum becomes n times itself in T years R × T = (n − 1) × 100
Rate/Time changes by a known amount Δ SI = (P × ΔR × T)/100
Equal interest from split parts P1 R1 T1 = P2 R2 T2
Equal amount from split parts (same R) Parts ∝ 1 / (1 + RT/100)
n equal annual installments, debt P P = nx − xRn(n−1)/200
Difference of Amounts at two times R = (A2−A1)×100 / [P×(T2−T1)]
C.2 Mental math for fast percentage calculation
• 10% of any number = shift decimal one place left.
• 5% = half of 10%. 1% = shift decimal two places left. 20%, 30%... = multiply the
10% value.
• Odd rates like 12%, 17%: break into chunks — e.g. 12% = 10% + 2%, 17% = 10% +
5% + 2% — then add.
Example: SI on ₹8,000 at 12% for 1 year → 10% of 8000 = 800; 2% of 8000 = 160;
total = ₹960 — no long multiplication needed.
C.3 Common pitfalls to avoid
• Forgetting to convert months/days into years before plugging into the formula.
• Confusing Amount (A) with Interest (SI) — A is the total payable, SI is only the interest
portion.
• Treating a compounding clue ("compounded annually") as Simple Interest by mistake.
• Sign errors in rate-change problems — a decrease in rate gives LESS interest, not
more.
• Applying the plain SI formula directly to multi-year installment problems instead of the
dedicated installment formula.
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Part D — Rapid-Fire Practice Set
Questions
Q1. Find the SI on ₹15,000 at 9% p.a. for 2 years 4 months.
Q2. A sum amounts to ₹6,200 in 2 years and ₹7,400 in 5 years at SI. Find the Principal
and Rate.
Q3. A sum becomes 5 times itself in 16 years at SI. In how many years will it become 8
times itself at the same rate?
Q4. ₹6,200 is divided into three parts such that the SI on part 1 for 4 years at 5%, part 2
for 6 years at 4%, and part 3 for 8 years at 3% are all equal. Find the three parts.
Q5. What is the rate of SI per annum? Statement I: A sum triples itself in 12 years at SI.
Statement II: ₹5,000 amounts to ₹6,500 in T years where T equals R numerically. (Is
Statement I alone sufficient, Statement II alone, either, both, or neither?)
Answer Key
[Link]. Answer
1 ₹3,150
2 P = ₹5,000, R = 8%
3 28 years
4 ₹2,325, ₹1,937.50, ₹1,937.50
5 Either statement alone is sufficient
For full step-by-step explanations of each question, refer to Part B above — each
question here is built directly on a Type 1-5 pattern explained there.
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