Math Simple Interest Formula Example

If you borrowed 5000 5000 from a bank with an interest rate of 7 7 for a period of 8 8 years then the simple interest would be calculated as.

Math simple interest formula example. The formula for simple interest is given by. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments. Thus simple interest for a year si p r t 100 1000 100 1 100 rs 1000. The simple interest formula is used to calculate interest on an investment.

Simple interest formula is written as. Using the simple interest formula for future value. 6 months 6 12 year. Simple interest 4 000 4 5 3 540.

P principal which is your initial amount r interest rate as a decimal. Si p r t 100. Simple interest is simply calculated finding the product of the principal amount borrowed or lent the rate of interest and the term or repayment period of the loan. When you know the principal amount the rate and the time the amount of interest can be calculated by using the formula.

Simple interest 3 000 12 2 720. For the above calculation you have 4 500 00 to invest or borrow with a rate of 9 5 percent for a six year period of time. Rate of interest per year r 10. This type of interest usually applies to short term loans and this type of method is used to calculate it.

So let us change the given time period in years. How much interest does she have to pay the bank at the end of 2 years. She has to pay the bank 720 at the end of 2 years. Interest p r t 100 interest 5000 7 8 100 280000 100 2800 interest p r t 100 interest 5000 7 8 100 280000 100 2800.

Interest 1 000 10 x 5 years 500 plus the principal of 1 000 means alex needs to pay 1 500 after 5 years. But the time period given in the question is in months. A p 1 r t 10 000 1 0 075 8 16 000. Amount that rishav has to pay to the bank at the end of the year principal interest 10000 1000 rs 11 000.

The business will pay back a total of 16 000. You multiply the principal interest rate and time. In simple interest formula we use time period in years. Wanda borrowed 3 000 from a bank at an interest rate of 12 per year for a 2 year period.

I is the. Where p amount of loan. Alex borrows 1 000 for 5 years at 10 simple interest.