Calculate Simple Interest

Business Math

Calculate Simple Interest

• When money is borrowed, interest is charged for the use of that money for a certain period of time. When the money is paid back, you have to include both the principal and the interest.

• To calculate simple interest, you must know:1. The principal (money you borrowed)

2. Interest rate charged per year

3. Time in years

Calculate Simple Interest

I = Prt    A = P(1+ rt)

whereI = simple interestP = principalr = interest rate per yeart = time in yearsA = amount

Calculate Simple Interest

• 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 installments over 2 years, calculate the amount of interest paid over the 2 years, and the total amount to be paid back.

Calculate Simple Interest

• 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 installments over 2 years, calculate the amount of interest paid over the 2 years, and the total amount to be paid back.

• P = 1,500.00 (principal)• r = 12.00% (interest rate per year)• t = 2 (time in years)

Calculate Simple Interest

For an online calculator for simple interest, see:

matrixlab-examples.com/simple-interest-formula.html

Calculate Simple Interest