Aptitude :: Simple Interest

  1. Principal:

    The money borrowed or lent out for a certain period is called the principal or the sum.

  2. Interest:

    Extra money paid for using other's money is called interest.

  3. 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

    (ii). P = 100 x S.I. ; R = 100 x S.I. and T = 100 x S.I. .
    R x T P x T P x R