Lesson
Title: Simple Interest (S.I).
Objective :
At the end of this lesson, you will be able to solve problems related to Simple Interest, Principal, Time, and Rate.
What you should know :
You should be familiar with, change of subject formula and perform basic arithmetic operations.
Introduction :
Simple Interest is simply the amount of money added to money borrowed over some time at a given rate agreed upon by both the lender and the borrower.
Also, It can be seen as the amount you get from investing in a business over a given time and rate in percentage.
Presentation /Conclusion :
To calculate the S.I of the above scenario, the formula S.I = PRT/100 is used where
P = Principal (invested money), T = Time (Maturation), and R = Rate (The percentage of the principal and time).
=> To find the Simple interest, use
S.I = PRT /100
=> To find the Principal, P = I x 100/RT, where I is the interest (Simple Interest). The principal is calculated in the amount denomination.
=> To find Time, T = I x 100/PR, where I is the interest (Simple Interest). Time is calculated in years.
=> To find Rate, R = I x 100/PT, where I is the interest (Simple Interest), Rate is calculated in %
E.X 1. For how long must I leave #10000 in a bank to an interest of #240, the rate being 3% simple interest?
Step:
In this question, Time is unknown, where
R = 3%, S.I = #240, and P = #10000.
=> Using the formula for Time, T = I x 100/PR, let's substitute the variables for values.
T = 240 * 100 /10000 * 3 = 8.
=> Therefore, T = 8yrs.
E.x. 2. Calculate the principal which earns #77025 simple interest in 11 years at 7% rate.
Step:
=> Principal is unknown, where
S.I = #77025, T = 11, and R = 7.
=> Using the formula, P = I x 100/RT, substitute the variables for values.
=> P = 77025 x 100/7 x 11 = 100,032.
=> Therefore, P = #100,032.
E.x 3. Calculate the simple interest of principal #250 for 8yrs at 6% rate.
=> S.I is unknown, where P = 250, T = 8, and
R = 6.
=> Using the formula S.I = PRT/100, substitute the variables for values.
=> S.I = 250 * 6 * 8/100 = 120.
=> Therefore, S.I = #120.
Conclusion / Summary:
We've been able to solve problems relating to, Time, Principal, and S.I.
The same formulas and steps can be used to solve any related problems of such and ensure that the unit is included in the final answer.
Exercise :
=> Find the time in which #3000 will earn #7200 at 8%.
=> A Saver invested #6000 at 6% simple interest for 4 years, how much was her investment worth by the end of this period?