Simple interest

• Simple interest


  Interest calculated on the original principal amount only, not on the accumulated interest
• Calculating simple interest


  1. Find the percentage of the principal amount

  2. Add the interest to the original principal amount
• To calculate simple interest for multiple years, take the original principal and add the annual interest multiplied by the number of years
• P = Principal (amount borrowed or invested)
• r = Annual rate of interest as a decimal
• P = Principal amount (amount borrowed or invested)
• Simple interest does not take into account any compounding of interest during the time period.
• The formula for calculating simple interest is: Simple Interest = (Principal Amount) x (Interest Rate) x (Time Period).
• Simple Interest = P x r x t
• Simple interest is calculated by multiplying the principal amount, the interest rate, and the time period in years.
• r = rate per year as a decimal
• t = Time period in years
• I = Interest earned/paid
• A = Amount owed/earned at end of time period
• Compound interest takes into account the accumulation of interest over time, resulting in higher total amounts than simple interest.
• P = Principal amount or initial investment
• I = total interest earned over n years
• I = Total interest earned over the given time period