Thursday, November 3, 2016

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:




 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%