Principal : The money borrowed or lent out for a certain period is called the principal or the sum.
Interest : Extra money paid for using other's money is called interest.
Simple Interest (S.I.) : If the interest on a sum borrowed for a certain period is reckoned uniformly (i.e. on the same principal throughout the loan period) then it is called simple interest.
Important Formulae :
Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then,
S.I. = P x R x T100
P = 100 x S.I.R x T
R = 100 x S.I.P x T
T = 100 x S.I.P x R