Simple Interest

The interest is the amount of money that is paid in addition to the amount borrowed. The total interest is directly proportional to the amount borrowed and the duration of the loan.

Concept Name Symbol
Amount borrowed Principal P
Loan duration Time t
Percentage charged Rate r
Additional amount Interest I

If time is expressed in years:

Simple Interest in Years

If time is expressed in months:

Simple Interest in Months

If time is expressed in days:

Simple Interest in Days

Examples

Calculate the amount of simple interest that is paid over a period of five years on a principal of $30,000 at a simple interest rate 6%.

Interest Solution

Calculate the total amount paid in six months on a principal of $10,000 at a simple interest rate of 3.5%.

Solution

Solution

How long will it take a principal of $25,000 at a simple interest rate of 5% to become $30,000?

Solution

Interest Solution