If the annual rate of SI is increased from 10% to 12.5%, the annual interest increases by Rs. 125. Find the principal.

Simple Interest (SI) is interest calculated only on the original principal amount. Formula: SI = (P x R x T) / 100, where P = Principal, R = Rate of interest per annum, T = Time in years. Amount = P + SI = P(1 + RT/100). Simple Interest is a key topic in SSC CGL, IBPS Bank PO, SBI Clerk, Railway, and all competitive exams.

From SI formula: P = (SI x 100) / (R x T). R = (SI x 100) / (P x T). T = (SI x 100) / (P x R). Example: If SI is Rs 600, Principal Rs 5000, Time 3 years, then Rate = (600 x 100)/(5000 x 3) = 4% per annum. Shortcut: If SI doubles the principal (SI = P), then Time x Rate = 100.

Simple Interest (SI): Interest calculated only on principal. Amount after n years = P + PRT/100. Compound Interest (CI): Interest calculated on principal plus accumulated interest. Amount = P(1 + R/100)^n. CI is always greater than SI for same P, R, T. Difference for 2 years: CI - SI = P(R/100) squared. These formulas help solve comparison problems in banking exams.

Common SI problem types: 1) Find SI when P, R, T given, 2) Find P or R or T when other values given, 3) Money doubles/triples problems, 4) Two investments at different rates. Useful shortcuts: Money doubles when RT = 100. Money becomes 3 times when RT = 200. Money becomes n times when RT = 100(n-1). Practice at least 10 SI problems daily for competitive exam preparation.

Mixed SI problems: If total interest from two loans (P1 at R1% and P2 at R2%) for T years is I, then P1 x R1 + P2 x R2 = I x 100/T. For equal SI from two investments: P1/P2 = R2 x T2 / (R1 x T1). Annual repayment installment formula for equal installments over n years at r% SI also appears in IBPS PO Mains.