Simple Interest Formula Math

Click here to watch a short video that will help you to complete this activity.

Simple interest formula math. Examples of finding the interest earned with the simple interest formula example. Always take a moment to identify the values given in the problem. The formula for simple interest helps you find the interest amount if the principal amount rate of interest and time periods are given. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

And n is the duration of the loan. The principal is the amount of money you borrow or invest. I prt becomes r i pt remember to use 14 12 for time and move the 12 to the numerator in the formula above. This type of interest usually applies to short term loans and this type of method is used to calculate it.

You multiply the principal interest rate and time. P principal which is your initial amount r interest rate as a decimal. Get your calculator and check to see if you re right. Application of simple interest formula in everyday life.

Simple interest formula is written as. Find the interest earned. R interest rate in percentage t time duration in years. When the amount of interest the principal and the time period are known you can use the derived formula from the simple interest formula to determine the rate as follows.

A 2 year loan of 500 is made with 4 simple interest. Si p r t 100. The rate of interest is the percent charged for the use of money. T 2 initial amount.

I is the daily interest rate. Where p amount of loan. In this activity you will explore the basics of buying a car and understand the real life application of the simple interest formula i prt. Interest i amount of interest.

The simple interest formula is used to calculate interest on an investment. To find the interest you can use this formula. The time is the duration or the time the money is invested or borrowed in years. Interest principal rate of interest time.