Simple interest is the money earned by investing some money referred to as the principal. A certain amount of interest is added to the principal, making an investment grow.
Formula
Interest = Principal × Rate × Time
Example
A laptop costs $1500; the interest rate on the loan is 12%. If the loan has to be paid back in weekly installments over a time period 2 years, then:-
P = $1500
R = 12% = 0.12
T = 2 years
According to the formula, Simple Interest will be:-