Simple Interest

Simple interest is a method of calculating interest on a loan or investment. It is calculated as a percentage of the principal amount, which is the amount of money borrowed or invested, and is based only on the original amount borrowed or invested, rather than including any accumulated interest.

Formula for Simple Interest

Simple interest can be calculated using the following formula:

Where:
> Principal (P) is the initial amount of money invested or borrowed
> Interest Rate (R) is the percentage rate at which interest is charged or earned
> Time (T) is the duration of the investment or loan (usually measured in years)

Amount = Principal (P) + Simple interest (S.I.)

For example, if you borrow $1,000 at a simple interest rate of 5% per year for 2 years, the interest you would owe would be:

Simple Interest = (1,000 x 5 x 2) / 100 = $100

So, the total amount you would owe at the end of 2 years would be:

Total Amount = Principal + Simple Interest = $1,000 + $100 = $1,100.

Simple Interest Formula For Months