What is Simple Interest? How to Calculate Simple Interest?

The simple interest is defined as a procedure or technique of determining the total amount of interest accrued on an amount with respect to the time specified. We denote the time as t.  The basic formula for calculating simple interest is as follows (p * r * t)/100, where p is the principal interest, r is the percentage rate of interest, and ‘t’ signifies the time spent.

The borrowed money by any money-giving organization, including banks, can be characterized as the principal which is denoted as p, interest, or amount. The rate refers to the interest as a % of the principal (which is defined as the money borrowed). Duration or time represents the period of the primary amount taken in this case. We may solve various instances linked to basic interest to help you understand the fundamentals.

What is Percentage?

The term percentage denoted by the symbol % comes from the Latin word ‘per centum,’ meaning  ‘by the hundred’ in mathematics.  A percentage is a portion or a ratio wherein the quantity of the whole is always zero. The sign ” %” symbolizes the phrase percentage. It is a pretty simple subject to comprehend. The percentage is defined as a mathematical concept that may be found in a variety of contexts. In this post, we will talk about percentage calculation, some important points to know, and several examples.

Some Examples Related to the Percentage Formula

Let’s go through a few examples to understand the concept of percentage in a proper manner.

Example 1: A class contains a total of 100 pupils. 80 of the pupils in the class are female. Determine the percentage of females & males in the class.

Solution: The total number of pupils enrolled in the class is 100.

Number of female pupils = 80

Number of male pupils = 100-80 = 20

Percentage of females pupils in the class will be equal to (80/100)*100= (8000/100) = 80%

Percentage of male pupils in the class will be equal to (20/100)*100= (20/100) = 20%

Example 2: Akash purchased 10 balls and read-only 3 of them. Determine the percentage of books the boy did not read.

Solution: Total number of balls purchased by  = 10

Number of unopened books = 10 – 3 = 7

Percentage required = (7 / 10) 100 = 700/10 = 70%

Visit Cuemath if you want to learn more about % in depth and in a fun and interactive way.

Simple Interest Formula

Using the formula of simple interest =  p * r * t/100 . Let’s go through a few examples to implement the formula.

Example 1: A woman named Rita wants to buy a present costing Rs. 400. However, she only had 200 rupees left in her coin purse. Secondly, if she gets a loan of Rupees. 200 from the merchant at an interest rate of 6% & commits to repay it in two years. And what’s the basic interest rate on this principal? To do this, we may plug the data from the given values into the preceding Simple Interest Formula, as seen below:

Solution: Here, Principal = 400,

Rate of interest = 6%, and Time given is equal to 2 years

So, Simple Interest = 400 * 6 * 2/100

When we solve the provided problem, we obtain 48 as our basic interest or borrowing cost for the gift.

As a result, Rita pays 48 rupees in simple interest to repay her Rs. 400 loan.

Example 2: Estimate the simple interest accrued if the principal is equal to $2500, the period of time equals two years & the interest rate is 5%.

Solution: Let’s note the given infromation,

Principal (amount) borrowed = $2500

Given time = Two years.

Rate of interest  equals 5 percent.

We already know the formula of simple interest = principal *rate* time/100

2500 * 2 * 5 / 100 =. 25000/100 = 250

Therefore, the simple interest will be equal to $250.

 

James Martin
James Martinhttps://www.ontimemagazines.com
James Martin is a passionate writer and the founder of OnTimeMagazines. He loves to write principally about technology trends. At OnTimeMagazines.com, he loves to share his opinion on what's happening in tech around the world.

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