RATE

In general, Interest is defined as the rent or charge which we pay for utilizing a particular thing or money (Principal). Most often it represents the payment for giving or using money (principal) for a period of time. Interest cannot be charged randomly, they are charged on some rates. The rate is decided by the owner of the property and the owner only can enjoy the benefits of the money acquired as interest. The formula and example problems for finding the rate of interest when the principal and time duration is given is seen in the following sections.

Formula to Calculate Rate

The General formula to calculate the simple interest is as follows,

Simple Interest, (S.I)=

-->P*N*R/100

Where,

P = Principal amount

N = Number of years

R = Rate of Interest.

From the above formula, the formula for rate is derived as,

Rate of Interest =

--> {(S.I)*100/P.N}