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- Simple Interest
- Important Formulas
| Suppose you have a loan of a certain sum of money from a bank or any cash lender for a particular time, you have to repay it with some additional amount after the expiry of that particular time. The additional amount paid by the you to the lender for the use of money is called interest. The money borrowed by you is called Principal. Interest is generally calculated as a percentage and the interest paid for the use of Rs. 100 is called the rate percent. | ||||||||
| Thus, Amount = Principle + Interest | ||||||||
| Simple Interest | ||||||||
When interest is calculated on the original principle for the total time period for which money is used, it is called Simple Interest. If P denotes Principle, n the number of units of time, r the rate of percent per annum, then |
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| Where P = Principal in rupees, r = rate percent per annum form, n = no. of units of time. | ||||||||
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