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Activity Discussion Math How will you calculate simple interest?

  • Shivani

    May 14, 2021 at 10:47 am
    Not Helpful

    You can calculate Interest on your loans and investments by using the following formula for calculating simple interest: Simple Interest= P x R x T ÷ 100, where P = Principal, R = Rate of Interest and T = Time Period of the Loan/Deposit in years.

  • Manpreet

    May 16, 2021 at 8:58 pm
    Not Helpful

    Simple interest is the interest given for a particular sum of money on a given rate. The sum of money is known as ‘principle’ and the interest is calculated for the given ‘rate’ for a given time.

    For example, think that a person borrowed a sum of 50,000 rupees from a bank which provides an interest rate of 5% p.a. . He borrowed the money for 1 year, so what will be the amount he needs to pay at the end of this 1 year?

    Well, the formula to calculate simple interest is :



    P= principle or amount of money

    R= rate of interest; it is given in percentage and thus is divided by 100 while using in the formula

    T= time until which the money is provided; it is calculated in year as the rate of interest is given as percentage per annum (where annum is the adverb of 1 year)

    Going back to our question, we have:

    P = 50,000

    R= 5%

    T= 1year

    Thus interest (S.I.) = (50,000 * 5 * 1)/100

    = 2,500 rupees

    Thus the person has to return an extra 2500 rupees to the bank

    The total amount to be returned = 50,000 + 2,500

    = 52,500 rupees

    I hope you found this helpful.

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