Simple 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:
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 “P” is the total principal or money lend , “A” is the total amount to be paid to lender at the end of lending term , “R” is the rate of interest per annum and “T” is total lending term in years then:
4. When , “T” is total lending term in years , “I” is the total Simple Interest accumulated in time “T” , “P” is the total principal lend and “R” is the rate of interest per annum then:
5. To find the Rate of interest We can use following formula:
Where, “R” is rate of interest , “I” is interest rate ,”P” is total principal and “T” is total time.
6. We can also calculate Principal amount by using formula:
Where, “I” is rate of interest , “T” is total , “R” 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 “R” is the rate on interest per month then “T” should be in months , If “R” is rate of interest per annum then “T” should be in Years.
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