Definition of  Algorithm 

An algorithm is a design or plan of obtaining a solution to a problem. The solution is presented by listing all steps in which they are carried out.
i) determine the correctness of the various steps.

ii) reduce the number of steps, if possible.

iii) increase the speed of solving the problem.

Suppose you want to calculate simple interest, if principal, time and rate of interest are given . The algorithm for solving this problem is given below.

Algorithm :
1. Read principal, time and rate of interest into three locations labelled as P,T,R.
2. Calculate S.I = PTR/100 (where S.I meens Simple interest)
3. Print S.I
4. Stop