Table of Content

• What is Simple Interest?
• Formula for Simple Interest
• Basic Concepts of Simple Interest
• Tricks Related Simple Interest
• Quick Percentage Calculations
• Daily Interest Calculation
• Monthly Interest Calculation
• Interest for Multiple Years
• Solved Examples
• Practice Problems
• FAQs

Calculation Type	Method	Example Calculation	Result
1% Calculation	Move decimal point two places to the left.	1% of $500.00	$5.00
5% Calculation	Calculate 1% and multiply by 5.	5 × 1 % 500	$25
10% Calculation	Move decimal point one place to the left.	10% of $500.00	$50.00
15% Calculation	Combine the results of 10% and 5%.	10% of $500 + 5% of $500	$75
25% Calculation	Multiply principal by 1/4.	500 × 1/4	$125
50% Calculation	Multiply principal by 1/2.	500 × 1/2	$250

Using these shortcuts, you can quickly determine interest rates for various principal amounts without the need for complex calculations.

Read More about Short Tricks for Percentage Calculation.

Daily Interest Calculation

Daily interest calculation is helpful for short-term loans or investments. Here’s a simple trick to calculate it:

Convert Annual Rate to Daily Rate using following relation:

Daily Rate = Annual Rate/365

For example, if the annual rate is 5%, the daily rate is 5/365 ≈ 0.0137 %.

Daily Interest = (P × R × T)/(365 × 100)

Where P is the principal and R is the annual interest rate.

Monthly Interest Calculation

Monthly interest calculations are common for loans and investments with monthly compounding. Here’s an efficient way to do it:

Convert Annual Rate to Monthly Rate:

Monthly Rate = Annual Rate/365

For example, if the annual rate is 5%, the monthly rate is 5/365 ≈ 0.0137 %.

Monthly Interest = (P × R × T)/(12 × 100)

Misc Tricks on Simple Intereset

Some other miscllenous tricks related to simple interest are give below:

• If the interest on a sum of money is 1/x of the principal, and the number of years equals the rate of interest, then the rate can be calculated using the formula: r = √(100/x).

• If a sum of money becomes x times its original ammount in t years at simple interest, then the rate is calculated as [100(x – 1)]/t %.

• If a sum of money becomes x times its original amount in t years at a simple rate of interest, then the time is calculated as [100(x – 1)]/R.

• If an amount P₁ is lent out at simple interest of R₁% per annum and another amount P₂ at simple interest rate of R₂% per annum, then the rate of interest for the whole sum can be given by:

R = (P₁R₁ + P₂R₂​)/(P₁ + P₂)

Read More,

• Simple Interest Calculator
• Simple Interest Quizz
• Interest Rate Formula
• Compound Interest Formula

Solved Examples

Problem 1: Calculate 1% of $800.

Solution:

Move the decimal point two places to the left.

1% of $800 = $8

Problem 2: Calculate 5% of $900.

Solution:

Calculate 1% and multiply by 5.

1% of $900 = $9

5% of $900 = 5 × 9 = $45

Problem 3: Calculate 10% of $750.

Solution:

Move the decimal point one place to the left.

10% of $750 = $75

Problem 4: Calculate 15% of $400.

Solution:

Combine the results of 10% and 5%.

10% of $400 = $40

5% of $400 = $20

15% of $400 = 40 + 20 = $60

Problem 5: Calculate 25% of $1200.

Solution:

Multiply the principal by 1/4.

25% of $1200 = 1200 × 1/4 = $300

Problem 6: Calculate 50% of $1500.

Solution:

Multiply the principal by 1/2.

50% of $1500 = 1500 × 1/2 = $750

Problem 7: Calculate the daily interest on a principal of $1000 at an annual rate of 6%.

Solution:

Convert annual rate to daily rate: Daily Rate = 6/365 ≈ 0.0164%.

Calculate Daily Interest

Daily Interest = (P × R × T)/(365 × 100) = (1000 × 6 × 1)/(365 × 100) = 6000/36500 = 60/365 ≈ $0.164

Problem 8: Calculate the monthly interest on a principal of $2000 at an annual rate of 4%.

Solution:

Convert annual rate to monthly rate: Monthly Rate = 4/12 ≈ 0.333%

Calculate monthly interest:

Monthly Interest = (P × R × T)/(12 × 100) = (2000 × 4 × 1)/(12 × 100) = (8000)/(1200) ≈ $6.67

Problem 9: If the interest on a sum of money is 1/8 of the principal, and the number of years equals the rate of interest, find the rate.

Solution:

Use the formula: r = √(100/x)

Given: x = 8

r = √(100/8) = r = √(12.5) = 3.54 %

Problem 10: If a sum of money becomes 4 times its original amount in 5 years at simple interest, find the rate.

Solution:

Use the formula: r = [100(x – 1)]/t %

x = 4, t = 5

r = [100(4 – 1)]/5 = 300/5 = 60%

Problem 11: If a sum of money becomes 3 times its original amount in 10 years at a simple rate of interest, find the time.

Solution:

Use the formula: t = [100(x – 1)]/R

Given: x = 3, R = 10%

t = [100(3 – 1)]/10 = 200/10 = 20 years.

Problem 12: If an amount of $1500 is lent out at a simple interest rate of 5% per annum and another amount $2500 at a simple interest rate of 7% per annum, find the rate of interest for the whole sum.

Solution:

P₁ = $1500 and R₁ = 5%,

P₂ = $2500 and R₂ = 7%

Use the formula: R = (P₁R₁ + P₂R₂​)/(P₁ + P₂)

R =(1500 × 5 + 2500 × 7)/(1500 + 2500) = (7500 + 17500)/4000 = 25000/4000 = 6.25%

Practice Problems

Problem 1: Calculate 1% of $750.

Problem 2: Calculate 5% of $1200.

Problem 3: Calculate 10% of $650.

Problem 4: Calculate 15% of $900.

Problem 5: Calculate 25% of $1600.

Problem 6: Calculate 50% of $2000.

Problem 7: Calculate the daily interest on a principal of $500 at an annual rate of 4%.

Problem 8: Calculate the monthly interest on a principal of $3000 at an annual rate of 3%.

Problem 9: If the interest on a sum of money is \frac{1}{10} of the principal, and the number of years equals the rate of interest, find the rate.

Problem 10: If a sum of money becomes 5 times its original amount in 8 years at simple interest, find the rate.

FAQs on Simple Interest Tricks

What is Simple Interest?

Simple Interest is a quick and straightforward method to calculate the interest charged or earned on a principal amount over a specified period of time.

What is formula for simple interest?

Simple Interest is calculated using the formula:

SI = (P × R × T)/100​

Where P is the principal amount, R is the rate of interest per annum, and T is the time period in years.

How can I quickly calculate Simple Interest for a half-yearly period?

To calculate Simple Interest for a half-yearly period, you can use half the annual rate of interest. For example, if the annual interest rate is 8%, for a half-year, use 4%.

Can Simple Interest be calculated for non-annual rates?

Yes, Simple Interest can be calculated for any time period. Just adjust the rate and time period to match.