Simple Interest

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Learn about simple interest and how to calculate simple interest at


Presentation Transcript



What is Simple Interest ?:

What is Simple Interest ? The interest for an initial amount (investment, loan, etc.,) for a certain period of time is the SIMPLE INTEREST.

How is Simple Interest Calculated?:

How is Simple Interest Calculated? Simple interest is calculated with the formula : SI = P*N*R 100 Where, P = Prinicipal Amount N = Number of Years R = Rate of Interest


Principal The amount borrowed from someone as a loan or debt is called the principal.

Interest Rate:

Interest Rate The rate at which the interest is paid for the initial amount borrowed.

Number of Period in Years:

Number of Period in Years The time period you will take to return the original amount borrowed.

Simple Interest Calculation:

Simple Interest Calculation Consider you have borrowed a sum of Rs. 50,000 from a lender for 2 years at a rate of 2 %. To find SI, substitute all the values in formula, = 50000 * (2/ 100) * 2 = 500 * 2 * 2 = 2000 Hence you need to pay Rs.2000 as SI.


Alternatively, you can also find the principal amount, rate of interest and time period with other known values with Simple Interest Calculator

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