Interest is the amount paid by the borrower to the lender or is the money earned on the deposited funds. Interest is paid or earned as a percentage of the amount borrowed or invested, called principal. The percentage of the principal that is paid as a fee or earned as an interest is called the interest rate. The amount to interest depends on the interest rate, the amount of money borrowed (principal) and the length of time that the money is borrowed.<\/p>\n
Simple interest is the most basic type of interest. It is the easiest type of interest to calculate and understand. Simple interest is calculated using the formula:<\/p>\n
SI = P \u00d7 r \u00d7 t<\/strong><\/p>\n P = Principal (the initial amount)<\/p>\n r = annual rate of interest in percentage<\/p>\n t = period of time<\/p>\n There is another way of writing the formula by converting the percentage.<\/p>\n SI = P \u00d7 r \u00d7 t\/100<\/strong><\/p>\n Amount to be paid at the end of period is the sum of principal and interest.<\/p>\n A = P + SI<\/strong><\/p>\n Example:<\/p>\n Archie borrowed $200 at a 5% rate for 3 years. So the interest paid is:<\/p>\n SI = 200 \u00d7 5 \u00d7 3\/100 = $30<\/p>\n Amount paid at the end of 3 years:<\/p>\n A = $200 + $30 = $230<\/p>\n Same formula can be modified to find the rate of interest, principal amount or time period.<\/p>\n Rate, r = SI \u00d7 100\/(P \u00d7 t)<\/strong><\/p>\n Principal, P = SI \u00d7 100\/(r \u00d7 t)<\/strong><\/p>\n Time, t = SI \u00d7 100\/(P \u00d7 r)<\/strong><\/p>\n <\/strong>SchoolTutoring Academy is the premier educational services company for K-12 and college students. We offer tutoring programs for students in K-12, AP classes, and college. To learn more about how we help parents and students in Halifax visit: Tutoring in Halifax.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Interest is the amount paid by the borrower to the lender or is the money earned on the deposited funds. Interest is paid or earned as a percentage of the amount borrowed or invested, called principal. The percentage of the principal that is paid as a fee or earned as an interest is called the […]<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[11,13],"tags":[950,951,1388,1639,1835],"class_list":["post-1580","post","type-post","status-publish","format-standard","hentry","category-math-fundamentals","category-pre-algebra","tag-interest","tag-interestrate","tag-principal","tag-simpleinterest","tag-time-period"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/posts\/1580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/comments?post=1580"}],"version-history":[{"count":0,"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/posts\/1580\/revisions"}],"wp:attachment":[{"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/media?parent=1580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/categories?post=1580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/schooltutoring.com\/help\/wp-json\/wp\/v2\/tags?post=1580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}