Hello and welcome to our new video.
In this video, we are going to see how to calculate simple
interest in excel.
We all know the formula of simple interest because we have
studied it in early classes.
We have studied it in 8th class and 10th class.
So, let's see how to calculate it in excel.
So, first of all, I open excel.
If you have forgotten the formula of simple interest, let
me tell you that it is written here.
First of all, there is principal amount.
What do we multiply in principal amount?
We multiply time and then multiply interest rate and divide
it by 100.
Here is some data.
The principal amount is 50,000.
It is for one year and the percentage is 15%.
The interest on my principal amount in simple interest is
fixed.
For one year, I have to calculate 15% of 50,000.
It is not like compound interest.
Compound interest is the interest on principal amount.
We will talk about compound interest in next video.
Here, the principal amount is given.
It is for one year and the percentage is 15%.
We are getting interest.
So, we have to calculate simple interest.
Here, the principal amount is 20,000.
Here, it is written in months.
Here, it is written in years.
We will see how it is done.
Here, the percentage sign is written.
Here, the percentage sign is not written.
Why it is not written?
If you want to write here, how it is written?
First of all, I have to calculate 50,000.
For simple interest, I have to follow this formula.
First of all, I have to sign equals to.
After signing equals to, I have to take the principal
amount.
What is my principal amount?
It is 50,000.
What should I do directly?
Either write the name of the cell here.
If you don't want to write the name of the cell, then take
the cursor of your mouse and select it.
Like I have selected here.
After that, the next thing is to multiply the principal
amount by time.
What is to be multiplied by time?
Multiply sign.
The sign of multiply will be written as a star on your
keyboard.
The number of star is 8.
If you press shift plus 8, the number of star will be
written.
Here, I have to multiply by time.
What is for time?
I have written 1.
After that, I have to multiply again.
Here, the percentage is written.
The rate is written.
The interest rate is written.
I have selected it.
After this, will we divide it by 100?
Should we do it or not?
I will say that we should not do it.
We will not do it because in this cell, you will see that
the percentage is already written.
We had read one thing in the last video, cell formatting.
What is cell formatting?
Here, at home, one second, it will take the wrong one.
First, I will do it.
After that, I will tell you.
Multiply by 15%.
First, let's get the answer.
I will enter it.
The answer is 7500.
Now, I was talking about cell formatting.
This is what cell formatting is.
If you go here, you will get it.
In percentage,
Excel has to tell us in which format we are taking things.
What will be the format of the cell?
It will be in percentage.
It will be in time.
It will be in long date.
It will be in short date.
We have already done this.
We have already told you that 15% We have already told you
in percentage.
If you click on it, then percentage is written.
If you click on it, then general is written.
Now, let's see the next one.
Like this one.
There are two things here.
One is that the percentage is not written here.
The second thing is that things have been given here in the
month.
How will you apply the formula in this?
What do you have to do here?
You have to put an equal sign.
What do you have to do after that?
What is the first thing?
It is the principal amount.
So, you have selected the principal amount.
After that, what is it?
You have to multiply the time.
Now, if you multiply the time, what is it?
It is 12.
I have taken 12.
Now, remember one thing.
If you write 12 directly, then what will happen?
Excel will think that you have to calculate for 12 years.
Whereas, we have to calculate for 12 months.
So, you have to divide here.
From whom will you divide?
You will divide it by 12.
Now, how much was 12 in B6?
And how much is here?
If you divide 12 by 12, then what will happen? 1 comes.
It is the same thing which was written here.
1 year.
After that, what I have to do next?
I have to do the percentage.
So, I have to multiply.
And I have written here.
I have selected it.
And I have done it.
Enter.
Now, it has shown me that it is 3,60,000.
Which is the wrong answer.
Obviously, it is the wrong answer.
Why? Because here, the format of the cell is general.
There is no percentage.
Either convert it to percentage by going here.
Or what is the other way?
If you don't want to convert it to percentage, then what
you have to do in the divide?
You have to put 100.
So, here we put 100 in the formula.
So, what you have to do?
Take it in the bracket.
All the way to here.
I have taken it in the bracket till here.
And I have divided it.
From whom?
I have divided it by 100.
Okay.
As I got in the formula.
After that, I have entered.
See, how much I have got? 3,600.
After that, let's see here.
Here, what I have to calculate?
I have to calculate that 35,000 is my principal amount.
And I have to calculate 5 months here.
And here, it is the same thing.
In percentage, what is the cell formatting?
It is not in percentage.
It will be in general.
See, here it is in general.
Now, what we will do in this?
We will put equals to.
After that, what do we write first?
We write the principal amount.
How much is the principal amount?
I have 35,000.
After this, what we have to do?
What is in multiply?
Time.
What we will do in multiply?
Time.
What is time?
This cell is 5.
We will divide it by 12.
Otherwise, what will it understand?
Excel will understand 5 years.
So, how much we have to divide it by?
By 12.
Now, what we have to do next?
Next thing is that I have to write my rate, interest rate.
How will we multiply interest rate?
By 12.
No, not by 12.
Let's take the cell directly.
So, if value of cell changes, then it will change
automatically.
And it will give us the correct output.
So, here we have written C8.
Now, what we have to do?
We have to divide it by 100.
If we don't divide it by 100, then what we have to do?
Convert it.
Let's convert it.
One second.
This is your wrong answer.
Because I didn't divide it by 100.
So, now what I will do?
Let's divide it first.
After that, I will show you how to convert it by percentage
and get the answer.
So, here I have divided it by 100.
And my result is Rs.1750.
Now, what we have to do?
Let's change it.
Let's change it to percentage.
So, what is this?
Let's subtract it from here.
So, let's write it again.
12%.
So, what is this?
Let's remove the divide from here.
When we take 12%, if I take cell formatting, then I won't
divide it after this.
I didn't divide it here.
I will divide it here.
And I will enter it.
And my result is Rs.1750.
I hope you understood.
Now, if you change the time here, then we will know that
the formula is big.
The value will change.
Now, write it as 5 years.
See, it has changed.
If you want to write instead of 5, write 7 years.
Or you can change it in month also.
For example, tell me 6 months.
If we write 6 months, then it will become half.
It will become Rs.1800.
So, I hope you understood how to apply the formula of
simple interest in Excel.
If you still have any doubt in this video, then you have to
watch this video again.
I will meet you in the next video.
Till then, keep practicing.