Simple Interest: Principal and Rate

Simple Interest

Principal

• The principal is the initial amount of money borrowed or invested
• It is the base amount on which interest is calculated
• Principal is typically represented by the symbol 'P'
• Principal can be a lump sum or a series of payments

Rate

• The rate is the percentage at which interest is calculated
• It is usually expressed as a decimal or a percentage
• Rate is typically represented by the symbol 'R'
• Rate can be annual, monthly, or for any other time period

Time

• Time is the duration for which the money is borrowed or invested
• It is usually expressed in years, months, or days
• Time is typically represented by the symbol 'T'
• Time can be a fixed period or a variable period

Note: The formula to calculate simple interest is:

Simple Interest (SI) = (P x R x T)

Where P is the principal, R is the rate, and T is the time.

Simple Interest

Principal

• Initial amount of money borrowed or invested, serving as the base for interest calculation
• Represented by the symbol 'P'
• Can be a lump sum or a series of payments

Rate

• Percentage at which interest is calculated
• Expressed as a decimal or percentage
• Represented by the symbol 'R'
• Can be annual, monthly, or for any other time period

Time

• Duration for which money is borrowed or invested
• Expressed in years, months, or days
• Represented by the symbol 'T'
• Can be a fixed or variable period

Formula and Calculation

• Simple Interest (SI) formula: SI = (P x R x T)
• Calculates interest based on principal, rate, and time