Simple Interest
Simple Interest
Simple interest is the friendliest money topic in SBI Clerk, worth one to three quick marks, and it rests on a single formula. Interest is charged only on the original principal every year, so the yearly interest never changes — that constancy is what makes SI sums so fast. Get the formula and its three rearrangements fluent, and you can solve for whichever quantity is missing without pausing to think about which version to use.
The Core Formula
Simple interest SI = P × R × T / 100, where P is the principal, R the rate per annum and T the time in years. The amount you finally repay is A = P + SI. Because the same principal earns the same interest each year, the total is strictly proportional to time: double the years and you double the interest. That linear behaviour is exactly what separates simple interest from compound interest and keeps its arithmetic light.
SI = P × R × T / 100 A = P + SI R = 100 × SI /(P × T) T = 100 × SI /(P × R)
Shortcut: Interest as a Percentage
Skip the formula entirely for round numbers by reading R × T as a single percentage of the principal. At 8% for 3 years, the interest is simply 24% of P — for P = 5,000 that is 5,000 × 24/100 = 1,200 in one step. This 'multiply the rate by the time, then take that percent' trick handles most exam SI questions mentally and pairs perfectly with the fraction table from the first topic. It also makes 'find the difference between two rates or two times' questions trivial, because the difference in interest is just the difference in the combined R × T percentage applied to the same principal, so you never recompute the whole sum twice.
| Unknown | Rearranged formula | Quick read |
|---|---|---|
| Interest | SI = P × R × T / 100 | (R × T)% of P |
| Rate | R = 100 × SI /(P × T) | per-year % of P |
| Time | T = 100 × SI /(P × R) | years to reach SI |
| Principal | P = 100 × SI /(R × T) | back out the base |
Solved Examples
Example 1: P 5,000, R 8%, T 3 yrs → SI = 5000 × 8 × 3/100 = 1,200. Example 2: If 6,000 earns 1,080 in 3 years, R = 100 × 1080/(6000 × 3) = 6%. Example 3: A sum doubles in 8 years at simple interest, so SI equals P; then R = 100 × P/(P × 8) = 12.5% per annum.
✗ Charging interest on the growing amount each year | ✓ Charging interest only on the original principal
When Principal, Rate or Time Is Unknown
SBI Clerk rarely asks for the interest directly; it hides one quantity and gives the rest, so fluency with the rearranged forms matters more than the base formula. For a 'sum becomes n times' question, note that SI = (n − 1) × P, which cancels the principal and leaves R × T = 100(n − 1). A sum tripling in 10 years therefore needs R × T = 200, giving R = 20%. Recognising which quantity is missing and reaching straight for its version of the formula is the whole skill in this topic.
साधारण ब्याज केवल मूल धन पर लगता है, इसलिए हर साल ब्याज समान रहता है। SI = P × R × T / 100। शॉर्टकट: (R × T)% को सीधे मूलधन पर लगाएँ।
Exam Pointer — Simple interest gives one to three easy SBI Clerk marks, often as a 'find the rate' or 'sum becomes n times' question rather than a direct interest sum. Master the three rearranged formulas so no version costs you thinking time. These are near-guaranteed marks — never leave an SI question unattempted.
60-Second Recap
- SI = P × R × T / 100; amount A = P + SI.
- Interest is constant each year — strictly linear in time.
- Shortcut: interest = (R × T)% of the principal.
- Sum becomes n times → SI = (n − 1)P, so R × T = 100(n − 1).