How to Calculate Simple Interest ?
The simple interest formula ( I = P * R *T / 100 ) calculates the interest earned or paid on a principal amount over a specific time period. Here, ( I ) is the interest, ( P ) is the principal amount, ( R ) is the interest rate per time period, and ( T ) is the time duration. It’s commonly utilized in financial contexts to determine interest on loans, deposits, or investments where interest is calculated linearly, without compounding.
Example:
Let’s say Rahul borrows ₹10,000 from Priya at a simple interest rate of 8% per annum. Using the simple interest formula ( I = P * R *T ) where P is the principal amount, R is the interest rate, and T is the time in years, we can calculate the interest. If Rahul repays the loan after 2 years, the interest would be:
I = P * R *T we are representing the 8% interest rate in decimal form I = (10,000 × 8 × 2) / 100 = ₹1,600 So, Rahul would have to pay ₹1,600 as interest on the loan.
Simple Interest Calculator
Simple Interest Calculator calculates interest accrued on a principal amount over a fixed period, based on a predetermined interest rate. It provides users with the total amount payable, comprising the original principal and the accrued interest.
Simple Interest is the method to calculate the interest where we only take the principal amount each time without changing it with respect to the interest earned in the previous cycle.
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