- Principal:
The money borrowed or lent out for a certain period is called the principal or the sum.
- Interest:
Extra money paid for using other’s money is called interest.
- 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 | ||
| 100 |
| (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 |
