To calculate what percentage 1 rupee of interest represents, we need to know the principal amount and the time period for which the interest is calculated. For example, if we have a principal amount of 100 rupees and the interest rate is 1%, then 1 rupee of interest will be earned in a year.
Using the formula for simple interest, we can calculate the interest rate as:
Simple interest = (Principal x Rate x Time)/100
Rearranging the formula to solve for the rate, we get:
Rate = (Simple interest x 100)/(Principal x Time)
Using the example above, where the principal amount is 100 rupees and the interest earned is 1 rupee, we can calculate the interest rate as:
Rate = (1 x 100)/(100 x 1)
Rate = 1%
Therefore, 1 rupee of interest on a principal amount of 100 rupees over a period of one year represents an interest rate of 1%. This calculation can be applied to any principal amount and time period to determine the corresponding interest rate.
Per month 1 rupee interest means how much percentage
The above explanation was for Yearly interest. Lets look at monthly interest calculation
If the interest is 1 rupee per month, then the interest rate will depend on the principal amount that is generating the interest.
For example, if the principal amount is 100 rupees, and the interest is 1 rupee per month, then the interest rate can be calculated as:
Rate = (Simple interest x 100)/(Principal x Time)
Rate = (1 x 100)/(100 x 12)
Rate = 0.83%
So in this case, an interest of 1 rupee per month on a principal amount of 100 rupees represents an interest rate of 0.83% per month or approximately 10% per annum.
Similarly, if the principal amount is 5000 rupees, and the interest is 1 rupee per month, then the interest rate can be calculated as:
Rate = (Simple interest x 100)/(Principal x Time)
Rate = (1 x 100)/(5000 x 12)
Rate = 0.0167%
So in this case, an interest of 1 rupee per month on a principal amount of 5000 rupees represents an interest rate of 0.0167% per month or approximately 0.2% per annum.
Therefore, the interest rate will vary based on the principal amount and the time period for which the interest is calculated when the interest amount is fixed at 1 rupee per month.
