Learning simple interest
Simple interest plays a major role in everyday life. When people want to get loans (car, study, vacation etc), they want to get an idea of how much they should repay. People save some money for some definite purpose like buying a bike for the son, sending the children for higher studies or spend vacation abroad and would like to know how long they should save and how much they should save. I like to share this Compounded Interest Calculator with you all through my article.
Simple interest formula is a basic formula that we can use to know the interest.
I = P R T over 100.
Three things are needed to calculate the interest.
P= Principal, the amount put in the bank or borrowed from the bank.
R=Rate
T= time (how many years the money is going to be in the bank or how many years it is going to take to repay the loan).
This is the tricky part as the time is given sometimes in years or months. One should note the rate carefully to see it is for a month or a year and calculate accordingly. Having problem with how to solve linear equations by substitution keep reading my upcoming posts, i will try to help you.
Examples on simple interest
Examples :1) Find the simple interest earned on $2800 deposited in a bank at 2% annual interest after 5 years.
Here, Principle = $2800 , rate= 2% = 0.02, and time = 5 years.
Simple interest= 2800 x 0.02 x 5= $280.
2) Tommy gives a loan $1000 to Jane at a rate of 5% to be paid off in 7 years. Find the total amount to be paid by Jane.
Simple interest = 1000 x 0.05 x 7
= 350
Amount to be paid off by Jane= $1000 + $350 =$1350.
Simple interest plays a major role in everyday life. When people want to get loans (car, study, vacation etc), they want to get an idea of how much they should repay. People save some money for some definite purpose like buying a bike for the son, sending the children for higher studies or spend vacation abroad and would like to know how long they should save and how much they should save. I like to share this Compounded Interest Calculator with you all through my article.
Simple interest formula is a basic formula that we can use to know the interest.
I = P R T over 100.
Three things are needed to calculate the interest.
P= Principal, the amount put in the bank or borrowed from the bank.
R=Rate
T= time (how many years the money is going to be in the bank or how many years it is going to take to repay the loan).
This is the tricky part as the time is given sometimes in years or months. One should note the rate carefully to see it is for a month or a year and calculate accordingly. Having problem with how to solve linear equations by substitution keep reading my upcoming posts, i will try to help you.
Examples on simple interest
Examples :1) Find the simple interest earned on $2800 deposited in a bank at 2% annual interest after 5 years.
Here, Principle = $2800 , rate= 2% = 0.02, and time = 5 years.
Simple interest= 2800 x 0.02 x 5= $280.
2) Tommy gives a loan $1000 to Jane at a rate of 5% to be paid off in 7 years. Find the total amount to be paid by Jane.
Simple interest = 1000 x 0.05 x 7
= 350
Amount to be paid off by Jane= $1000 + $350 =$1350.
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