7/12/2019

All Interest formulas

Interest is a type of fee paid for assets and money which are borrowed for some time.
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:


S.I. = \dfrac{P\times T\times R}{100}



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,

A = P +I = P \times \left( \dfrac{100+RT}{100}\right)

3. If โ€œPโ€ is the total principal or money lend , โ€œAโ€ is the total amount to be paid to lender at the end of lending term , โ€œRโ€ is the rate of interest per annum and โ€œTโ€ is total lending term in years then:

 P = \dfrac{100 \times A}{RT + 100}

4. When , โ€œTโ€ is total lending term in years , โ€œIโ€ is the total Simple Interest accumulated in time โ€œTโ€ , โ€œPโ€ is the total principal lend and โ€œRโ€ is the rate of interest per annum then:

 T = \dfrac{100 \times I}{PR}

5. To find the Rate of interest We can use following formula:

 R= \dfrac{100 \times I}{PT}


Where, โ€œRโ€ is rate of interest , โ€œIโ€ is interest rate ,โ€Pโ€ is total principal and โ€œTโ€ is total time.

6. We can also calculate Principal amount by using formula:

 P = \dfrac{100 \times I}{TR}


Where, โ€œIโ€ is rate of interest , โ€œTโ€ is total , โ€œRโ€ 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 โ€œRโ€ is the rate on interest per month then โ€œTโ€ should be in months , If โ€œRโ€ is rate of interest per annum then โ€œTโ€ should be in Years.