Most Important Formulas of Simple Interest
Simple interest is a method that is used to calculate the amount of interest charged on an amount at a given rate and for a given period of time. In simple interest, the principal amount is always the same.
Simple interest is calculated with the following formula: S.I. = P × R × T, where P = Principal, R = Rate of Interest in % per annum, and T = Time, which is generally calculated as the number of years.
PRINCIPAL (P)
The money you deposit or which is in pure form without any interest or deduction on it is called the PRINCIPAL.
INTEREST (I)
The extra money you get from the organization/bank/person after depositing is called the INTEREST.
AMOUNT (A):
The total money means the PRINCIPAL and INTEREST you get after a fixed time is called the AMOUNT.
Rate (R):
Rate is the rate of interest at which the principal amount is given to someone for a certain time, the rate of interest can be 5%, 10%, or 13%, etc. The rate of interest is denoted by R.
Time (T):
Time is the duration for which the principal amount is given to someone. Time is denoted by T.
Most Common Formulas
Download PDF for Formula Sheets: Simple Interest
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