Simple Interest Important formulas:
The money borrowed or lent out for a certain period is called the principal or the sum.
Extra money paid for using other’s money is called interest.
Simple Interest (S.I.):
If the interest on a sum borrowed for certain period is reckoned uniformly, then it is called simple interest.
Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then
(i). Simple Intereest = (P x R x T /100 )
(ii). P = (100 x S.I /R x T);
R = (100 x S.I /P xT). and T = (100 x S.I / P xR) .