1. Principal:
The money borrowed or lent out for a certain period is called the principal or the sum.
2. Interest:
Extra money paid for using other’s money is called interest.
3. Simple Interest (S.I.):
If the interest on a sum borrowed for a certain period is reckoned uniformly, then it is called simple interest.
Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then
