How to Calculate Rate of Interest from Actual Ineterst?

Interest is computed by applying rate of interest on the principal. If we have the principal and actual interest, we can derive rate of interest by dividing the interest by the principal and multiplying the result by 100.

Following example make things clear:

Calculation of Interest with rate of interest:

Formula:

	Rate of interest to calculation of actual interest:
	Interest (I)	=	Principal × Rate of Interest

Example:

Rate of interest to calculation of actual interest:
	Example A	Example B
Principal	25,00,000	100
Rate of Interest	10%
Actual Ineterst	2,50,000	10

 

Calculation of Rate of Interest from interest and Principal:

Formula:

	Example 2
			Interest
	Rate of Interest	=		×	100
			Principal

Example:

Actual interest to calculation of rate of interest:
Principal	25,00,000	100
Actual Interest	2,50,000	10
Rate of Interest	10.00%	10.00%