Interest is paid as a fee or compensation for the depreciation of money or degradation of assets.
And Simple interest is a method of calculating Interest in which the borrower pays lender a certain percent fee of the original value borrowed, every year or month.
Some importation formulas related to simple interest are:
Simple Interest Formulas:
1. To calculate the total simple interest (S.I.) on a principle amount (P) at a certain rate per annum ( R), after a certain years of time(T) is calculated using formula:
2. If Amount (A) is the total amount to be paid to the lender at the end of lending term , Principal (P) is the total money lend from the lender , Interest (I) is the total interest accumulated , Rate of Interest (R) is the rate of interest per annum and Time (T) is the total time in years for which money is lend then,
&bg=ffffff&fg=000000&s=2 "A = P +I = P \times \left( \dfrac{100+RT}{100}\right)")
3. If โPโ is the total principal or money lend , โAโ is the total amount to be paid to lender at the end of lending term , โRโ is the rate of interest per annum and โTโ is total lending term in years then:
4. When , โTโ is total lending term in years , โIโ is the total Simple Interest accumulated in time โTโ , โPโ is the total principal lend and โRโ is the rate of interest per annum then:
5. To find the Rate of interest We can use following formula:
Where, โRโ is rate of interest , โIโ is interest rate ,โPโ is total principal and โTโ is total time.
6. We can also calculate Principal amount by using formula:
Where, โIโ is rate of interest , โTโ is total , โRโ is rate of interest.
Please note that , In all of the above formulas , The unit of rate of interest (I) and Time (T) should be corresponding , for example if โRโ is the rate on interest per month then โTโ should be in months , If โRโ is rate of interest per annum then โTโ should be in Years.
2. If Amount (A) is the total amount to be paid to the lender at the end of lending term , Principal (P) is the total money lend from the lender , Interest (I) is the total interest accumulated , Rate of Interest (R) is the rate of interest per annum and Time (T) is the total time in years for which money is lend then,
3. If โPโ is the total principal or money lend , โAโ is the total amount to be paid to lender at the end of lending term , โRโ is the rate of interest per annum and โTโ is total lending term in years then:
4. When , โTโ is total lending term in years , โIโ is the total Simple Interest accumulated in time โTโ , โPโ is the total principal lend and โRโ is the rate of interest per annum then:
5. To find the Rate of interest We can use following formula:
Where, โRโ is rate of interest , โIโ is interest rate ,โPโ is total principal and โTโ is total time.
6. We can also calculate Principal amount by using formula:
Where, โIโ is rate of interest , โTโ is total , โRโ is rate of interest.
Please note that , In all of the above formulas , The unit of rate of interest (I) and Time (T) should be corresponding , for example if โRโ is the rate on interest per month then โTโ should be in months , If โRโ is rate of interest per annum then โTโ should be in Years.
