Simple Interest is a method to determine or calculate the total Interest charged on a particular sum at a given time and interest rate. However, the principal amount is always the same. Simple Interest is one of the kinds of Interest applied by banks, and compound interest is also one of them. Here, the method of Interest always applies to the original principal amount, and the rate of Interest is the same for every cycle.

There are a few terms to keep in mind while solving a simple interest problem.