Intrest Definition Math

Amount that rishav has to pay to the bank at the end of the year principal interest 10000 1000 rs 11 000.

Intrest definition math. The principal is the amount of money you borrow or invest. A 3 year loan of 1 000 at 10 costs 3 lots of 10 so the interest is 3 1 000 10 300 simple interest is almost never used in the real world with compound interest being preferred. Si prt where p principal r rate of interest t time of period. Interest principal rate of interest time.

Money paid for the use of other money. Alex borrows 5000 from the bank at a 5 interest rate and has to pay 250 interest in the first year. The rate of interest is the percent charged for the use of money. T time period involved in months or years.

Time for which it is borrowed t 1 year. R rate of interest per year as a percent. From the base formula a p 1 rt derived from a p i and i prt so a p i p prt p 1 rt note that rate r and time t should be in the same time units such as months or years. Simple interest is calculated by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

Sam invests 1000 and receives 60 in interest after a year. Interest is the money paid for the use of someone else s money or assets. A p 1 r k kt a p 1 r k k t. Simple interest benefits consumers who pay their loans on.

Thus simple interest for a year si p r t 100 1000 100 1 100 rs 1000. The compound interest can be found with the formula. Rate of interest per year r 10.