Arithmetic

Simple Interest

Formula

I = (P × R × T) / 100

What is Simple Interest?

Simple interest is a method of calculating the interest on a principal amount at a fixed rate over a period of time. It is commonly used in basic financial calculations.

Variables

I
I — Interest
P
P — Principal amount
R
R — Annual interest rate (in %)
T
T — Time period (in years)

Worked Examples

Example 1

Find the simple interest on $1000 at 5% per year for 3 years.

Solution:

I = (1000 × 5 × 3) / 100 = 15000 / 100 = $150

Frequently Asked Questions

Related Formulas

Percentage Change

((New Value − Original Value) / Original Value) × 100

Compound Interest

A = P × (1 + R/100)^T

Speed, Distance, Time

Speed = Distance / Time

Percentage of a Number

Result = (Percentage / 100) × Number

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