Q&A for How to Calculate Simple Interest

Multiply the principal by the interest. For instance, if you borrowed $100 at 8%, you'd multiply the $100 by 1.08. The 1 is the principal amount and then .08 is the 8% interest, so you'd get $108.

Calculating simple interest will help you understand your monthly payments on a loan. If you pay your interest in full each month on a simple interest loan, you can keep it from accruing and causing your loan to get much bigger.

Use the simple interest formula. Enter the amount of the principal (P), then multiply it by the interest rate (r) in decimal form. Multiply the result by the time period of the loan (t) to calculate the interest.

Calculate the simple interest, then divide the result by the number of months covered by the period of the loan. For instance, if it’s a 1-year loan, divide the interest by 12. For a 2-year loan, divide it by 24, and so on.

Start by calculating the interest using the simple interest formula. Here, you would multiply the principal ($115,000) by the rate (0.065) and the number of years for your loan (which you haven't provided. This tells you the amount of interest you'll pay. Add that to the principal to get the total amount you'll pay over the life of the loan, then divide that amount by the number of payments you'll make. For example, if your loan is for 10 years and you're making monthly payments, you would divide the total amount by 120 (10 years x 12 months in each year).

To determine your monthly payment, divide $35,000 by 24 (the number of months in 2 years). To determine the interest rate, divide the interest ($3,000) by the product of the principal ($30,000) times the years (2).

It was in the bank for 3 years.

(P×T×R)/100

(8000×11×73)/(100×365)

Total Loan Amount * Rate of Interest/100 * 1/12. Here 1 denotes a month. So, basically if you want to calculate interest for two months, then replace 1 with 2 in the above formula.

If the payments are monthly, simple interest is calculated by multiplying the outstanding principal by one-twelfth of the annual interest rate.

For simple interest, use the original amount borrowed.

It is interest calculated on a principal which has been increased by previous interest payments. Essentially it's "interest on interest."

The money being lent may not necessarily take a year to pay back. If someone was lent say $300 even with an interest rate, it may only take months for them to pay it back. With interest calculated monthly, it can be more accurate, otherwise you would have a large amount of interest being paid on a small/large amount of money each year, giving a lump sum that someone couldn't possibly pay within the time given by the bank or loaner.

The savings are multiplied by 1.0025 every month. In a year it would make $120 x 1.0025 ^ 12. You didn't specify the savings time though; replace 12 with the number months you are saving.

That depends upon the policy of the financial institution .

It would take 14 months.

An annual rate of simple interest is calculated by dividing the total amount of interest paid in a year by the amount borrowed.

Multiply principal (35) by interest rate (.08) by time (one month, which is 1/12 or 0.125 of a year): (35)(.08)(0.125) = 0.35 lakh. (The 30 years is irrelevant.)

Yes. You can reduce payments on simple interest loans, but it depends on whether or not additional payments are being added to principal.

Talk to your bank about it, they will know. Typically when you take out the loan they will tell you what the interest will be.

It will take 3 years to earn 525 simple interest at the rate of 5% per annum.

You need a compound interest rate of approximately 7.2%.

"r" is the simple interest rate per year. "p" is the principal amount. "t" is the amount of time involved, expressed in years. "I" is the amount of interest earned during the specified time period. Solving the equation for "r," r = I / pt.

If there is no amount, principal, or simple interest given, then it is impossible to calculate because it is the amount, principal, and time that bring about the interest.

$22,000.

Interest = principal, multiplied by interest rate, multiplied by time.

If you're dealing with an annual rate of interest, divide the total interest paid in a year by the interest rate.

No. Figuring compound interest involves a more complicated formula.

If the interest rate is quoted for a three-month period, the simple interest would amount to $126. If it's an annual rate, the simple interest for three months would be $31.50.