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Simple Interest

Comparing Quantities · Class VII

Slide principal, rate and time to see interest and final amount.

10,000 Rs
type a value
100100000
8 %/yr
type a value
120
3 yr
type a value
0.510
Live values
  • Simple Interest2,400
  • Amount12,400
xy
  • SI over time

Formulas in this lab

  • Simple Interest
    P R T100\dfrac{P\,R\,T}{100}
  • Amount
    P+P R T100P + \dfrac{P\,R\,T}{100}
Tip: Simple interest grows linearly with time; the line passes through the origin.

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.