Lesson 1 of 1 | Mathematics / Simple Interest
Simple Interest: Formula and Shortcuts
1 practice test
Simple Interest (SI)
Simple interest is charged only on the original amount (principal), never on interest already earned. RRB Group D asks 1–3 SI questions in the Mathematics section.
Key terms
- Principal (P): money borrowed or deposited
- Rate (R): interest per ₹100 per year (% per annum)
- Time (T): in years (convert months ÷ 12)
- Amount (A): P + SI
Core formulas
- SI = (P × R × T) / 100
- A = P + SI = P (1 + RT/100)
- P = (SI × 100) / (R × T)
- R = (SI × 100) / (P × T)
- T = (SI × 100) / (P × R)
Worked example
₹2,000 at 5% per annum for 3 years: SI = 2000 × 5 × 3 / 100 = ₹300; Amount = ₹2,300.
Shortcuts
- Money doubles in T years → R = 100 / T. (Doubles in 10 years → 10%.)
- Money becomes n times in T years → R = (n − 1) × 100 / T.
- SI for 1 year = P × R / 100 — then just multiply by the number of years.
Common traps
- Time given in months — divide by 12.
- Question asks for Amount, not SI — add the principal back.
Analogy
Think of simple interest like renting out a bicycle. Every year the renter pays you the same fixed rent for the same bicycle — the rent never grows because the bicycle (principal) stays the same. After 3 years you have your bicycle back plus 3 equal rent payments. That fixed, repeating rent is simple interest.