Simple Interest
Comparing Quantities · Class VII
Slide principal, rate and time to see interest and final amount.
- Simple Interest2,400
- Amount12,400
- SI over time
Formulas in this lab
- Simple Interest
- Amount
Frequently asked questions
▶What is the simple interest formula?
Simple Interest equals principal times rate times time divided by 100, written $\frac{PRT}{100}$. So Rs 10000 at 8% for 3 years gives 10000 * 8 * 3 / 100 = Rs 2400 as interest, plus the original Rs 10000 back.
▶How do I use the simple interest lab?
Slide principal P, rate R and time T. The lab shows the simple interest and the final amount P + SI. Try P = 5000, R = 10, T = 2 to see SI = Rs 1000 and amount = Rs 6000.
▶How is simple interest used in Indian post office savings?
Many Indian post office schemes and short-term FD deposits use simple interest for fixed periods. A Rs 20000 deposit at 7% for 5 years gives SI = 20000 * 7 * 5 / 100 = Rs 7000, total Rs 27000. The lab gives an instant check before you sign the form.
▶Simple interest vs compound interest: which is more?
Compound interest is always more (for the same P, R, T over more than 1 year) because interest also earns interest. SI on Rs 10000 at 10% for 2 years is Rs 2000, but compound gives Rs 2100. For long periods like 10 years, the gap becomes huge, which is why banks prefer CI.