Simple Interest and Compound Interest

Interest: Interest is the amount of money we pay for the use of some amount of money

There are two types of interests,

a) simple interest: Simple interest is the Interest paid / compensated only on the original principal, not on the interest accrued

b) compound interest: interest means that the interest Which includes the interest calculated on principal amount

Algebra Formula to find simple interest :

Simple interest I = PRT

Where, P is the Principal amount, R is the Rate of interest, N is Time duration.

When we knows interest I we can find p, n or r using the same formula ,

Different forms of algebra simple interest formula

Algebra formula to find Compound Interest:

FV = PV (1+r)ⁿ

PV is the present value

r is the annual rate of interest (percentage)

n is the number of years the amount is deposit or borrowed for.

FV = Future Value is the amount of money accumulate after n years, including interest.