The Simple Interest Formula Explained
Simple interest represents a quick, non-compounding method of calculating the interest charge on a loan or the growth on a basic fixed deposit.
$$\text{SI} = \frac{P \times R \times T}{100}$$
Where:
- $P$: Principal starting capital
- $R$: Annual percentage interest rate
- $T$: Time in years (if given in months, $T = \text{months} / 12$)
The total maturity sum is simply $\text{Total Amount} = P + \text{SI}$.