Home » General Knowledge (GK) MCQs » Maths GK MCQs

Which of the following is a correct formula to calculate simple interest?

31. Which of the following is a correct formula to calculate simple interest?

1. Simple Interest = (Principal x Rate x Time) / 100
2. Simple Interest= (Profit / Cost price) x 100
3. Simple Interest= Principal + Interest
4. Simple Interest = (Principal x Rate x Time) + 100

Answer

The correct answer is: A) Simple Interest = (Principal x Rate x Time) / 100

Explanation

The correct formula is: Simple Interest = (Principal x Rate x Time) / 100,

Where,

• The principal is the original amount borrowed or invested.
• The annual interest rate (expressed as a percentage) is known as the rate.
• Time is the duration (in years) for which money is borrowed or invested.