Annual Simple Interest Math

I prt becomes r i pt remember to use 14 12 for time and move the 12 to the numerator in the formula above.

Annual simple interest math. Simple interest amount principal amount rate m n. Simple interest is money you can earn by initially investing some money the principal. However it can also be expressed as a percentage per month week day etc. The formula for this is.

Help with your math homework. Get your calculator and check to see if you re right. A percentage the. Work out the interest for one period and multiply by the number of periods.

Simple vs compound interest. The annual rate of interest is the interest charged per year expressed as a percentage of the principal. But unlike simple interest compound interest is added to the principal. Let s use an example to see how this formula works.

A p 1 rt where p is the principal amount of money to be invested at an interest rate r per period for t number of time periods. Where r is in decimal form. Simple interest formulas and calculations. Text per year is also called as text per annum.

For example 4000 dollars is deposited into a bank account and the annual interest rate is 8. Use this simple interest calculator to find a the final investment value using the simple interest formula. Calculate the simple interest amount of principal amount of 5 000. Use the following simple interest formula.

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. The simple interest amount is equal to the principal amount times the annual interest rate divided by the number of periods per year m times the number of periods n. Visit cosmeo for explanations and help with your homework problems. Examples of finding the interest earned with the simple interest formula.

In the compound interest formula the principal is symbolized by a p just as in the simple interest formula. Compound interest investment graph. I p r t where p is the principal or money deposited r is the rate of interest t. This calculator for simple interest only finds i the simple interest where p is the principal amount of money to be invested at an interest rate r per period for t number of time periods.

Work out the interest for the first period add it on and then calculate the interest for the next period etc. How much is the interest after 4 years. R and t are in the same units of time. Like simple interest compound interest is charged on the principal.

Simple interest calculation formula. Usually the rate of interest is expressed as a percentage per year. An example showing the difference between the two.