Simple and Compound Interest
P - Principal, the sum of money lent or borrowed. .
R - Rate of interest: Annual interest, often expressed as a percentage. .
T - Time period for which the money is lent or borrowed. .
Simple Interest = Principal * Time * Rate of interest / 100 .
SI = P * T * R .
For example, Principal is 4000, Rate of Interest is 8% and Time period is 4 years.
SI = 4000× 8% × 4 = 4000× 0.08 × 4.
= 1280. .
In compound interest , the principal amount with interest after the first time period becomes the part of principal for the next time period.
CI = [P (1 + R/100)^T] – P .
Total amount = [P (1 + R/100)^T] .
If time period is half-yearly, .