Interest

It is the sum which is paid by the borrower to the lender for using the money for a specific time period. The money borrowed is called the Principal. The rate at which the interest is calculated on the principal is called Rate of Interest. The time for which the money is borrowed is Time and the total sum of principal and interest is called the Amount.

Simple Interest

If P = Principal, R = Rate per cent per annum T = Number of years, SI = Simple Interest and A = Amount. Then,