PrepareSimple and Compound Interest · 3 min read
Simple Interest
Simple and Compound Interest
Simple Interest
Simple interest is a way to know the extra money you will pay or get on a loan without any stress.
Simple interest is a quick and easy method of calculating the interest charge on a loan.
It means you just multiply the daily rate by the main money and the time to get your answer.
In other words, it is determined by multiplying the daily interest rate by the principal and the number of days that elapse between payments.
Simple interest is just how we find the extra charge on a loan or an amount of money.
Simple Interest (S.I) is the method of calculating the interest amount for some loan/principal amount of money.
It is the way we calculate the reward for keeping money or the cost of borrowing it.
Mathematically;
Simple Interest = P x R/100 x T
Where:
P = principle
R = interest rate
T = time in years
Key points
- •Simple interest is a straightforward method for calculating interest on a loan or principal.
- •It is calculated by multiplying the principal, daily interest rate, and the number of days between payments.
- •The formula for Simple Interest (S.I) is P x R/100 x T.
- •In the formula, P is the principal, R is the interest rate (usually annual percentage), and T is the time in years.