Simple Interest

Terms : Simple Interest

  • Principal

    Principal is the money borrowed by a person.

  • Interest

    The extra money paid by the borrower for using another man's money is called interest.

  • Rate

    The interest obtained on 100 for 1 year is called rate percent per annum.

  • Simple Interest

    If the interest is calculated every year on the original sum borrowed, then the interest is called Simple Interest.

  • Amount

    The sum of principal and S.I. after a specified period of time is called amount.

  • S.I. = (P×R×T)/100
    where S.I. is simple interest
    P is principal
    R is rate
    T is time

  • P = (S.I.×100)/(R×T)

  • R = (S.I.×100)/(P×T)

  • T = (S.I.×100)/(R×P)

  • Amount = Principal + Simple Interest

  • To obtain interest for a period with dates count only one of the dates.

  • Convert days into years by dividing by 365 whether it is a leap year or not.

  • p.a. stands for per annum means for a year.