# Simple Interest Formulas, Shortcuts and Study Material

**Simple Interest Formulas - Page 2**

** Simple Interest Online Test - Page 3**

** Simple Interest Video Lecture - Page 4**

**Interest is the cost of borrowing money.An interest rate is the cost stated as a percent of the amount borrowed per period of time, usually one year.**

**Simple Interest: **Simple interest is calculated on the original principal only.Accumulated interest from prior periods is not used in calculations for the following periods. Simple interest is normally used for a single period of less than a year, such as 30 or 60 days.

Simple interest =

**P = principal (original amount borrowed or loaned)**

** R = interest rate for one period**

** T = number of periods**

* 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 interest=

*(ii)* P=