Simple interest is a method to calculate the interest rate on a loan payment. Interest is always depends on the original principle or sum, so interest on interest is not included. In this calculator, SI is calculated by multiplying the interest rate by the principle by the number of periods (time) [ SI Interest = (P * R * T ) / 100 ].
Calculate the simple interest for the loan or principle amount of Rs. 5000 with the interest rate of 10% per annum and the time period of 5 years.
P = 5000, R = 10% and T = 5 Years
You will get the simple interest as 2500 by multiplying the loan amount (payment) with the interest rate and the time period.