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### Course: Class 7 (Old)>Unit 7

Lesson 6: Simple interest

# Finding simple interest for many years

Have you wondered why we call simple interest 'simple'? Also, let's understand the basics behind the famous formula for calculating simple interest. Created by Aanand Srinivas.

## Want to join the conversation?

• i'm not discriminating or anything so no offense when I say that I don't understand what you're saying like I understand what your teaching and thank you so much for that, and I can make out 99% of what your saying but not 100% of what you're saying like I said i'm not trying to be rude like what is a rupee? so please don't take what I just said to literally/personally I think you're really cool.
• a rupee is the indian currency. similar to dollars.
• why did the voice of the man change?
• This is another instructor. It is not Sal Khan.
• im so confused but this cleared it up a bit. thank you!
• SO, is the simple interest formula (rate/100)*Principal?
• So does the rate always have to be 100 and, how do you calculate a formula like the distance someone drove or, how long it took them to get there.
• How do I calculate the principal amount of a loan?
• How do I calculate the principal amount of a loan? is I'm trying to figure out the principal amount of the loan with just the amount of interest earned the interest rate and the time of the length of the loan.
• You need to be given the interest, the rate and the time, then you substitute it and solve it like that. E.g:
I=\$100, P= unknown, R= 4% per annum, T = 2 years
Therefore,
100 = P*4%*2
P = 1250
Hope this helps!
(1 vote)
• Hi, when Mr.Srinivas was talking about the second formula, why is he multiplying 10 to the ratio? Is it because it is the rate. That is the thing that I am confused on. Someone please help me with this.
(1 vote)
• Its like this.... for every ₹100 you have to pay an additional ₹10 as per the rate. And the rate is 10% per annum. So for every ₹6025 you have to pay 10% of ₹6025 that is ₹602.5. So he multiplies it to get 10% of ₹6025.