Simple Interest FormulaWe’ll work with the Simple Interest Formula in this article. Below you can find an online calculator for this purpose. Interest is money paid by an individual or organization for the use of a sum of money called the principal. The interest is usually paid at the end of specified equal periods of time (such as monthly or annually).
To calculate the simple interest, we have these two easy formulas: I = P × r × t
and A = P (1 + r × t I = simple interest Example:A student purchases a new laptop by obtaining a simple interest loan. This high-tech computer costs $1500, and the interest rate on the loan is 12%. If the loan is to be paid back in monthly instalments over 2 years, calculate the amount of interest paid over the 2 years, and the total amount to be paid back. We use our calculator below, and enter the appropriate data... Enter Principal = 1,500.00 Enter interest rate per year = 12.00% Enter time in years = 2 Our simple interest calculator delivers these results: Simple Interest = 360.00 Amount = 1,860.00 This means that we have to pay back 1,500 (principal) + 360 (simple interest) = 1,860 (amount) in two years, in regular monthly instalments.
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