Simple Interest Cheat Sheet

Key Definitions

• Principal (P): The initial amount of money invested or borrowed. ✅

• Rate of Interest (R): The percentage at which interest is calculated on the principal. ✅

• Time (T): The duration for which the money is borrowed or invested, usually in years. ✅

• Simple Interest (SI): Interest calculated only on the principal amount. ✅

Important Concepts

Calculation of Simple Interest

• Simple Interest is straightforward and does not compound.

• It is directly proportional to the principal, rate, and time.

Applications

• Commonly used in loans, savings accounts, and investments.

Key Formulas

• SI: Simple Interest

• P: Principal amount

• R: Rate of interest (per annum)

• T: Time (in years)

A = P + SI

• A: Total amount after interest

Common Mistakes to Avoid

Common Mistake: Forgetting to convert the rate of interest or time into the correct units (e.g., years).

Memory Tricks

Tip: "PRT" — Principal, Rate, Time — remember the components of the formula!

Key Diagrams

   +-----------------+
   |                 |
   |     Principal    |
   |       (P)       |
   |                 |
   +--------+--------+
            |
            |  SI = (P × R × T) / 100
            |
   +--------v--------+
   |                 |
   |   Total Amount   |
   |        (A)      |
   |                 |
   +-----------------+