Simple Interest (SI)

5 min

Master the logic of constant interest for SSC and Railway exams.

The Golden Rule

Simple Interest is calculated only on the original principal for the entire duration. The interest remains constant every year because the principal never changes in this method.

Why Study SI?

Directly asked in SSC CGL, CHSL, and GD Constable exams.
Forms the essential foundation for understanding Compound Interest.
High scoring topic for Railway NTPC and Group D aspirants.

Memory Shortcuts

SI = (P × R × T) / 100
Doubling Time: T = 100 / R
Amount = Principal + Interest

Growth Analysis (P = 1000, R = 10%)

Year	Interest	Total Amount
Year 1	100	1100
Year 2	100	1200
Year 3	100	1300

Key Components

Principal

(The Initial Sum)

The Initial Sum

Rs. 5000 borrowed.

Rate

(Annual Percentage)

Annual Percentage

Bank charges 8% p.a.

Time

(Duration in Years)

Duration in Years

Loan for 3 years.

Instalment

(Equal Payments)

Equal Payments

Paying back in parts.

Common Exam Traps

Using T as months in formulaConvert months to years (T/12)

The formula requires Time in years. Always divide months by 12.

Calculating SI on current AmountCalculate SI only on Principal

Never add interest to principal before calculating next year's SI. That is CI.

Forgetting to add P to SI for AmountAmount = SI + Principal

If the question asks for 'Total Sum' or 'Amount', add the Principal back.

Practice Questions

Q1.Find SI on Rs. 5000 at 10% per annum for 2 years.

Q2.At what rate per annum will a sum of money double itself in 10 years?

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