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How this Online Simple Interest Calculator works?
This online simple interest calculator calculates an accrued amount that includes principal plus interest.
Simple interest equation
A = P(1 + rt)
A = Total Accrued Amount (principal + interest)
P = Principal Amount
I = Interest Amount
r = Rate of Interest per year in decimal; r = R/100
R = Rate of Interest per year as a percent; R = r * 100
t = Time Period involved in months or years
From the base formula, A = P(1 + rt) derived from A = P + I and since I = Prt then A = P + I becomes A = P + Prt which can be rewritten as A = P(1 + rt)
Simple Interest Equation example
Where: A = P(1 + rt)
t= 5 yrs
First, converting R percent to r a decimal r = R/100 = 3.875%/100 = 0.03875 per year.
Solving our equation:
A = 10000(1 + (0.03875 × 5)) = 11937.5
A = $11,937.50
The total amount accrued, principal plus interest, from simple interest on a principal of $10,000.00 at a rate of 3.875% per year for 5 years is $11,937.50.
Simple Interest Formulas and Calculations:
Use this simple interest calculator to find A, the Final Investment Value, using the simple interest formula: 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; r=R/100; r and t are in the same units of time.
A = P + I = P + (Prt), and finally A = P(1 + rt)
Calculate Total Amount Accrued (Principal + Interest), solve for A
A = P(1 + rt)
Calculate Principal Amount, solve for P
P = A / (1 + rt)
Calculate rate of interest in decimal, solve for r
r = (1/t)(A/P - 1)
Calculate rate of interest in percent
R = r * 100
Calculate time, solve for t
t = (1/r)(A/P - 1)