Answer:

Example 1: If Rs. 4000 is invested at 8% p.a. simple interest for 5 years, find the interest.

Sol: simple interest formula: 4000 × 8 × 5/100 = Rs. 1600

Example 2: If Rs 16,000 is invested at 12 percent simple annual interest, how much interest is earned after 6 months?

Sol: Since the annual interest rate is 12 %, the interest for 6 months is (16000x12x6)/12x100 = Rs. 960.