Understanding Simple Interest
Simple interest is a quick method of calculating the interest charge on a loan or the growth of a basic savings account[cite: 1]. It is calculated by multiplying the principal by the rate and the time period[cite: 1].
The Formula
Interest = (P × R × T) / 100
- P: The Principal amount borrowed or invested[cite: 1].
- R: The annual interest rate percentage[cite: 1].
- T: The time duration in years[cite: 1].