Simple interest

There are three factors which affect the amount of interest principal, rate and time so we can say that

“Whenever interest is paid or earn on principal amount is called simple interest.”

year		Interest	Balance
1	100000@10%p.a	10000	110000
2	100000@10%p.a	10000	120000
3	100000@10%p.a	10000	130000
4	100000@10%p.a	10000	140000

Discounts offer during the sale or purchase of commodity is the example of simple interest.

Formula:

Simple Interest = rate * time * principal