Final Cover - For Printing

Module 73

SIMPLE INTEREST

1. Principal
   Principal is the sum of money lent or invested on which the interest is paid.
   The concept of principal may be taught orally supported by necessary text material in
   Braille.
   Enabling the child to the mock banking transactions may also help him/her understand
   the idea of principal and the related terminologies like interest and rate of interest
   etc.


2. Interest
   The amount paid for use of the money lent is called the interest. The idea may be
   explained orally.


3. Rate of interest
   The interest to be paid along with the principal, in terms of percentage for every year
   is called as the rate of interest and is denoted as ‘I’.


4. Period
   The time taken to return the money is called as the period and is normally denoted as
   ‘n’. The idea may be explained to the child orally.


5. Simple interest
   When a person is in need of money, he/she borrows from individuals or banks or
   finance institutions. At the time of returning the money, he/she must pay some
   additional money for the benefit of using the money borrowed for a specific period.