Formula for rate of interest
- formula to find rate in simple interest
- how to find rate in simple interest example
- formula to get rate in simple interest
- formula for finding rate in simple interest with example
Compound interest calculator.
Simple Interest
The simple interest formula is used to calculate the interest accrued on a loan or savings account that has simple interest. The simple interest formula is fairly simple to compute and to remember as principal times rate times time.
An example of a simple interest calculation would be a 3 year saving account at a 10% rate with an original balance of $1000. By inputting these variables into the formula, $1000 times 10% times 3 years would be $300.
Simple interest is money earned or paid that does not have compounding.
Amount formula in simple interest
Compounding is the effect of earning interest on the interest that was previously earned. As shown in the previous example, no amount was earned on the interest that was earned in prior years.
As with any financial formula, it is important that rate and time are appropriately measured in relation to one another.
If the time is in months, then the rate would need to be the monthly rate and not the annual rate.
Ending Balance with Simple Interest Formula
The ending balance, or future value, of an account with simple interest can be calculated us
- how to calculate rate in simple interest
- how to get rate in simple interest