Simple Interest

Simple interest is calculated on the original principal only — it never earns interest on interest.

SI = P × R × T / 100, and Amount = P + SI.

Two traps appear again and again:

• Interest vs amount. If the question asks "what will he repay?", add the principal back. If it asks "how much interest?", do not.
• Time in years. 6 months is T = 0.5, not 6. 146 days is 146/365.

If the rate is per annum, the time must be in years. Always.

SI = PRT/100 · A = P + SI · P = 100×SI/(R×T)

SI on ₹5,000 at 8% p.a. for 2 years = 5000 × 8 × 2 / 100 = ₹800. The amount repayable would be ₹5,800 — but that is not what was asked.