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REET L1+L2 . Maths

Simple Interest

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REET Maths questions on Simple Interest are formula-based at heart, but they're often dressed up as 'money doubling/tripling' or 'percentage increase' problems. Here you'll find the formula, shortcuts and worked examples with full solutions.

  • 3 questions in REET 2024
  • Class 7-8 level
  • 8 min read
Verified 17 September 2026

How REET asks this topic

All three Simple Interest questions in REET 2024 were phrased as 'money becoming three times', 'money increasing by 40%' or 'money doubling' - meaning the interest wasn't given directly in rupees, but hidden as a percentage of the principal. The key to cracking this topic is converting the words into a percentage immediately and slotting it into the right place in the formula. The fastest way to solve such questions is to treat the principal as 100% first, translate the whole situation into percentages, and only then apply the formula - rather than working directly in rupees.

Simple Interest: the basic definition and formula

Principal (P) is the sum that is lent or borrowed. Rate (R) is the interest rate per year, and Time (T) is measured in years. Simple Interest (SI) is always calculated on the original principal, so it stays the same amount every single year.

Formula: SI = (P x R x T) / 100. The Amount (A) equals principal plus simple interest: A = P + SI = P x (1 + RT/100).

Formulas for isolating each variable

Finding Principal (P)
P = (SI x 100) / (R x T)
Finding Rate (R)
R = (SI x 100) / (P x T)
Finding Time (T)
T = (SI x 100) / (P x R)
Amount (A)
A = P + SI

The trick for 'doubling/tripling' questions

When a sum becomes n times its original value, it means the simple interest earned equals (n - 1) times the principal, i.e. (n - 1) x 100 percent of it. So Time T = (n - 1) x 100 / Rate.

Example: if a sum is to become 4 times itself at an annual rate of 8%, how many years will it take? Here n = 4, so the interest required = (4 - 1) x 100% = 300% of the principal. Time = 300 / 8 = 37.5 years.

Simple Interest vs Compound Interest (in brief)

In simple interest, the interest is always calculated on the fixed original principal, so the amount grows by the same amount every year (linear growth). Compound interest, by contrast, adds each year's interest to the total accumulated up to that point, so the amount grows at an increasing rate every year - this is covered in full detail in the next topic.

Being careful with months and fractional years

In the simple interest formula, Time (T) is always taken in years. If the question gives time in months, convert it to years first by dividing by 12 - for example, 8 months = 8/12 = 2/3 year, or 2 years 6 months = 2.5 years.

Example: find the simple interest on Rs 4,000 at 9% per annum for 8 months. Here T = 8/12 = 2/3 year. SI = (4000 x 9 x 2/3) / 100 = Rs 240. Even a small slip in the unit of time throws off the entire answer, so pay special attention to units.

Similarly, if both the principal and the amount are given but the rate or time is missing, first find the interest using SI = Amount - Principal, then use the same formula to find the remaining variable (rate or time) - this approach works for nearly every type of simple interest question.

Worked example: linear growth of the amount on Rs 1,000 at 10% p.a.

YearInterest for that year (Rs)Total accumulated amount (Rs)
11001,100
21001,200
31001,300
41001,400
51001,500

Notice that the interest is exactly the same (Rs 100) every single year, because it is always calculated on the original Rs 1,000 - that is the defining feature of simple interest.

How to teach this to children

Classroom activity

Show students a sample bank passbook or deposit receipt and have them identify the principal, rate and time themselves, then calculate the interest; run a mock 'bank' game in class where students calculate interest on deposits made at different times and cross-check each other's 'bank account' totals.

Teaching aids

Build a table/chart showing interest year by year so children can see that simple interest grows at a fixed rate every year, not a growing one. You can build a compound-interest table right next to it to show the contrast.

Common misconception

Students often plug the rate (R) straight into the formula without converting it from a percentage, or forget to convert time (T) into years when it's given in months. Some children also confuse 'money doubling' with 'interest doubling'.

Assessment idea

Create a question from a real bank's advertised interest rate or notice board and have students solve it, also asking them to identify whether the given amount is the principal, the interest, or the total amount. You can also ask what happens to the interest if the rate or time is doubled, so students understand the role each variable plays in the formula.

Trick to remember / exam tip

For 'money becoming n times' questions, remember directly: interest = (n - 1) x 100 percent of the principal. Divide that by the rate (R) and you get the time (T) immediately - don't waste time writing out the full principal and interest separately. Also remember that in simple interest the principal never changes, so when calculating interest year after year, always use that same original principal, never the accumulated amount.

Questions asked in REET 2024 (with solutions)

Question 100

In how many years, a sum will triple itself at the rate of 10% simple interest per annum ?

  1. A20 वर्ष
  2. B15 वर्ष
  3. C10 वर्ष
  4. D25 वर्ष

Explanation

धन तीन गुना होने का अर्थ है ब्याज = मूलधन का 2 गुना = 200%। साधारण ब्याज में समय = (ब्याज × 100)/(मूलधन × दर) = 200/10 = 20 वर्ष। विकल्प (C) 10 वर्ष में धन केवल दुगुना होता है।

Question 91

In how much time will the value of some money increase by 40% at the rate of 5% annual simple interest ?

  1. A5 वर्ष
  2. B6 वर्ष
  3. C10 वर्ष
  4. D8 वर्ष

Explanation

साधारण ब्याज में ब्याज = मूलधन × दर × समय / 100 होता है। धन में 40% वृद्धि का अर्थ है ब्याज = मूलधन का 40%। अतः 40 = 5 × समय, जिससे समय = 8 वर्ष। इसलिए विकल्प (D) सही है।

Question 91

In how much time will a sum of money doubles at 15% annual simple interest rate ?

  1. A13 वर्ष 4 माह
  2. B13 वर्ष 3 माह
  3. C6 वर्ष 8 माह
  4. D6 वर्ष 9 माह

Explanation

धन दुगुना होने का अर्थ है कि साधारण ब्याज = मूलधन (P)। SI = P×R×T/100 से P = P×15×T/100, अतः T = 100/15 = 20/3 वर्ष = 6 वर्ष 8 माह। 13 वर्ष 4 माह तो धन तिगुना होने का समय है।

Practice Questions

Question 1

Find the simple interest on ₹2,000 at 6% per annum for 3 years.

  1. A₹360
  2. B₹300
  3. C₹420
  4. D₹240

Explanation

SI = (P x R x T) / 100 = (2000 x 6 x 3) / 100 = Rs 360.

Question 2

Find the amount on ₹1,500 at 8% per annum after 2 years.

  1. A₹1,740
  2. B₹1,700
  3. C₹1,800
  4. D₹1,620

Explanation

SI = (1500 x 8 x 2) / 100 = Rs 240. Amount = 1500 + 240 = Rs 1,740.

Question 3

A principal of ₹1,500 earns ₹450 simple interest in 3 years. Find the rate of interest.

  1. A8%
  2. B9%
  3. C10%
  4. D12%

Explanation

R = (SI x 100) / (P x T) = (450 x 100) / (1500 x 3) = 10%.

Question 4

A sum earns ₹600 as simple interest in 4 years at 5% per annum. Find the principal.

  1. A₹2,500
  2. B₹3,000
  3. C₹3,500
  4. D₹2,000

Explanation

P = (SI x 100) / (R x T) = (600 x 100) / (5 x 4) = 60,000 / 20 = Rs 3,000.

Question 5

How much time will it take for ₹2,500 to earn ₹750 as simple interest at 10% per annum?

  1. A2 वर्ष
  2. B3 वर्ष
  3. C4 वर्ष
  4. D5 वर्ष

Explanation

T = (SI x 100) / (P x R) = (750 x 100) / (2500 x 10) = 3 years.

Question 6

At what rate will a sum become double itself in 8 years under simple interest?

  1. A10%
  2. B12%
  3. C12.5%
  4. D15%

Explanation

When a sum doubles, the interest equals 100% of the principal. Rate = 100 / 8 = 12.5%.

Question 7

At 12.5% per annum simple interest, in how many years will a sum become 5 times itself?

  1. A24 वर्ष
  2. B28 वर्ष
  3. C32 वर्ष
  4. D36 वर्ष

Explanation

When a sum becomes 5 times itself, interest = (5 - 1) x 100% = 400% of the principal. Time = 400 / 12.5 = 32 years.

Question 8

A sum amounts to ₹1,200 in 2 years and ₹1,320 in 3 years under simple interest. Find the rate of interest.

  1. A10%
  2. B12.5%
  3. C15%
  4. D8%

Explanation

Interest for the 3rd year = 1320 - 1200 = Rs 120. Interest for 2 years = 240, so principal P = 1200 - 240 = Rs 960. Rate R = (120 x 100) / 960 = 12.5%.

Question 9

In simple interest, the interest is calculated on:

  1. Aप्रत्येक वर्ष बदलते हुए मिश्रधन पर
  2. Bमूल मूलधन पर, जो स्थिर रहता है
  3. Cकेवल अंतिम वर्ष के मूलधन पर
  4. Dदर पर स्वयं

Explanation

In simple interest, interest is always calculated on the fixed original principal, which is why it stays the same every year - this is the key difference from compound interest.

Question 10

The most common mistake students make while learning simple interest is:

  1. Aदर को प्रतिशत से दशमलव रूप में बदले बिना सीधे सूत्र में रख देना
  2. Bमूलधन को सही पहचानना
  3. Cसमय को वर्षों में सही लिखना
  4. Dसूत्र को सही याद रखना

Explanation

Students often plug the rate (R) or time (T) into the formula without correctly converting units - for example, forgetting to convert months into years - which throws off the value in SI = PRT/100. Teachers should place special emphasis on units.

Frequently Asked Questions

How many questions come from Simple Interest in REET?+

REET 2024 had 3 questions from this topic, mostly disguised as 'doubling/tripling' or 'percentage increase' problems rather than direct formula plug-ins.

What is the formula for simple interest?+

Simple Interest (SI) = (Principal x Rate x Time) / 100, where the rate is taken as a percentage per year and time in years - if time is given in months, it must first be converted to years.

What is the difference between the Amount and Simple Interest?+

Simple interest is only the extra money earned on the principal, while the Amount is the sum of the principal and the simple interest: A = P + SI.

What is the main difference between simple interest and compound interest?+

Simple interest is always calculated on the original principal, while compound interest is calculated on the accumulated amount up to that year, so at the same rate and time, compound interest grows faster than simple interest.

If the principal, rate and time are the same, which is greater - simple interest or compound interest?+

For the first year, both are equal, but for any period longer than one year, compound interest is always greater than or equal to simple interest, because compound interest also earns interest on the previous year's interest. This is why people usually prefer compound-interest schemes for long-term investment. To save time in the exam, memorise this whole approach in advance and practise it repeatedly.

Read next

Profit and Loss

Previous topic - percentage-based profit and loss formulas.

Compound Interest

Next topic - compound interest formulas and comparison with simple interest.

REET Syllabus

See the complete REET Level 1 and Level 2 syllabus in one place.

REET 2024 Solved Paper

Read all REET 2024 solved questions, subject-wise.

Change Log

  • 17 September 2026 — English page published — mirrors the fact-checked Hindi page, independently bilingual-accuracy checked