Simple Interest is dependent on :
1. Principal 2. Rate of Interest 3. Time Period
So, we get the following Formula :
Simple Interest = (Principal X Rate X Time) / 100 OR SI = (PRT) / 100
Let solve following problems for further understanding:
Problem 1  Find interest on Rs 1000 for 2 years at 5% rate Answer  Principal = Rs 1000 Time = 2 years Rate of interest = 5%
Simple Interest = (PRT) / 100 Simple Interest = (1000 X 2 X 5) / 100 Simple Interest = Rs 100
Problem 2  Find interest on Rs 2000 for 2.5 years at 10% rate Answer Principal = Rs 2000 Time = 2.5 years Rate of interest = 10%
Simple interest = (PRT) / 100 Simple interest = (2000 X 2.5 X 10) / 100 Simple interest = Rs 500
