Simple Interest — CG TET Paper I Mathematics

Overview

Simple Interest (SI) is one of the most straightforward yet frequently tested topics in CG TET Paper I Mathematics. It forms the foundation of commercial mathematics and helps students understand how money grows over time when lent or borrowed. At the primary level, this topic connects mathematics to real-life situations — savings accounts, loans, and everyday financial transactions.

For CG TET, you must master the basic formula, understand each variable clearly, and solve problems quickly. Questions typically involve direct application of the formula or finding one unknown when other values are given. The topic also links to percentage calculations and ratio-proportion, so a strong grasp here strengthens your overall quantitative ability.

Expect 1-2 questions on Simple Interest in the content section. Speed and accuracy matter — most problems can be solved in under a minute if you know the formula variations well.

Key Concepts

• **Principal (P):** The original sum of money borrowed or invested before any interest is added. This is your starting amount.

• **Rate of Interest (R):** The percentage charged or earned per year (per annum). Always expressed as "% per annum" unless stated otherwise.

• **Time (T):** The duration for which money is borrowed or invested. Convert months to years (divide by 12) and days to years (divide by 365) when needed.

• **Simple Interest (SI):** Interest calculated only on the original principal throughout the entire period. Unlike compound interest, it does not include "interest on interest."

• **Amount (A):** The total money returned or accumulated after the time period. Amount = Principal + Simple Interest.

• **Relationship between variables:** All four quantities (P, R, T, SI) are directly proportional when others are constant — double the time, double the interest.

• **Annual vs other periods:** If rate is given per annum but time is in months, always convert time to years before applying the formula.

Formulas / Key Facts

**Primary Formula:** SI = (P × R × T) / 100

**Amount Formula:** A = P + SI = P + (P × R × T) / 100 = P(1 + RT/100)

**Finding Principal:** P = (SI × 100) / (R × T)

**Finding Rate:** R = (SI × 100) / (P × T)

**Finding Time:** T = (SI × 100) / (P × R)

**Finding Principal from Amount:** P = (A × 100) / (100 + RT)

**Key Fact 1:** When SI equals the Principal, then R × T = 100.

**Key Fact 2:** Money doubles at SI when R × T = 100 (e.g., 10% for 10 years, 20% for 5 years).