Simple Interest
Simple Interest (SI) is the extra money paid by a borrower to a lender for using a specific sum of money. In this method, the interest is calculated only on the original amount borrowed. This original amount is called the Principal. Unlike other methods, the interest amount remains constant every year if the rate and principal do not change. It is one of the most basic ways to understand how money grows over time.
Concepts (3)
This is the core formula used to find the interest. Principal (P) is the money, Rate (R) is the percentage, and Time (T) is in years. To find interest, multiply all three and divide by 100.
This is the core formula used to find the interest. Principal (P) is the money, Rate (R) is the percentage, and Time (T) is in years. To find interest, multiply all three and divide by 100. Example: For ₹1000 at 5% for 2 years, SI = (1000 * 5 * 2) / 100 = ₹100.
The Amount is the total money the borrower pays back after the time period ends. It includes both the original borrowed sum and the interest. Example: If you borrow ₹500 and the interest is ₹50, the Amount you return is ₹550.
The Amount is the total money the borrower pays back after the time period ends. It includes both the original borrowed sum and the interest. Example: If you borrow ₹500 and the interest is ₹50, the Amount you return is ₹550.
If you know the Interest, Principal, and one other factor, you can find the missing value by rearranging the formula. This is useful when a question asks 'In how many years' or 'At what rate'.
If you know the Interest, Principal, and one other factor, you can find the missing value by rearranging the formula. This is useful when a question asks 'In how many years' or 'At what rate'. Example: If interest is ₹20 on ₹100 in 2 years, Rate = (20 * 100) / (100 * 2) = 10%.
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