The simple interest on a given principal at a given rate for a given time is the product of three factors; the principal, the rate of interest (per annum) and the time (in years). Thus the formula for simple interest expresses in symbols is

I = Prt

where

I = Interest in rupees (or other units of money)
P = Principal in rupees (or other units of money)
r = Rate of interest ( in decimal form)
t = time (in years)

If S is used to symbolize the amount, then the definition of amount leads to the formula:

S =  P + I = P + Prt = P ( I + rt )

These formulas can be used to calculate the interest on a stated principal for a given time at a given rate, and to find the amount.

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