Simple Interest

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: Simple Interest = Principal × Rate × Time.

To convert months to years, divide the number of months by 12. For example, 18 months is equal to 18 ÷ 12 = 1.5 years.

The formula for calculating Simple Interest is: SI = P × R × T, where SI is Simple Interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

Simple Interest = 1400 × 0.04 × 5 = $280.

Total Amount = Principal + Simple Interest = 1200 + (1200 × 0.08 × 2) = $1,392.

Interest = 8000 × 0.09 × 18 = $12,960.

The principal amount is the initial sum of money that is invested or borrowed before interest is applied.

The rate in Simple Interest represents the percentage of the principal that is paid as interest over a specific period, usually expressed annually.

Total Balance = Principal + Simple Interest.

Simple Interest = 475 × 0.038 × 15 = $270.75. Total Balance = 475 + 270.75 = $745.75.