Math
Simple Interest Formula to Calculate Simple Interest Rate & Example
Table of Contents
What is Simple Interest?
Whenever you borrow money from someone, a fixed amount is charged on the borrowed money based on the agreement made between two parties that
Simple Interest Different From Compound Interest
There is a lot of difference between two values when amount is paid on the compound or the simple basis. At the same time, compound interest works in your favor magically when it comes to investments and taken as advantageous factor for the wealth creation. At the same time, both simple interest and compound interest terms are used frequently in financial concepts that help you in making informed decisions.
Simple Interest Formula
Here, the formula is given in mathematics for the calculation of Simple Interest –
\[\ Simple\;Interest=\frac{Principal\times Time\times Rate}{100}\]
If SI is charged at the five percent and it is continued for three consecutive years then the total amount payable in the end will be calculated as $1,500. In this way, SI paid annually is $500 and $1500 over a period of three years. The same amount in the case of Compound Interest will be much higher because amount is paid on previous accumulated interests and so on.
Simple Interest Examples:
Example: Find the rate of Simple Interest, if the principal amount is Rs. 2000, time period is 1 year and rate is 10%.
Solution
As per formula we have: \[\ Simple\;Interest=\frac{Principal\times Time\times Rate}{100}\]
\[\ =\frac{2000\times 1\times 10}{100} \]
\[\ =200\]
So, the rate of simple interest is Rs. 200

Math2 years ago
Surface Area of a Triangular Prism Formula & Volume of a Triangular

Math4 months ago
Average Rate Of Change Formula Made Simple

Math1 year ago
Triangular Pyramid Formula  Volume & Surface Area of a Triangular Pyramid

Math2 years ago
Percentage Formulas  How to Calculate Percentages of a Number?

Math4 months ago
Math Formulas Made Simple: A StepbyStep Guide

Math2 years ago
List of Pyramid Formula – Surface Area, Volume of Pyramid

Math2 years ago
What is Integration? List of Integration by Parts Formulas

Math4 months ago
Algebra Formulas and Expression with Example