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Title: Simple Interest (Mathematics of Investment)
Description: A compilation of formula for simple interest in the subject mathematics of investment. Easy to understand with a few example problems and solutions.

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Simple Interest Formula

r=

I = Interest

9

r=
...
Lina borrowed 10000 from a bank charging
12% simple interest with a promise that she
would pay the principal and interest at the
end of the agree term
...
22%



To find the time
t=

I=4500

r=
...


*rate must be converted to decimal number
...
75 or (3 years and 9 months)

Example:
1
...
5%
simple interest for 2 years
...
Rachel paid 7400 interest at 14
...
What was the original loan?
Solution:
I=7400

Solution:
P=5000

r=
...


r=
...
065x2

P=12758
...


2
...
Find the rate
...
125

30

30

12

12

Total days

t=5

30

July

Solution:

31

June

1
...
5% simple interest for 5 years
...


F=35000[1+(
...
625)

a
...
0

I=Prt
Time Between Dates

I=

Actual Time – 365 days or 366 days on leap years

I=1386
...


or{



� �
...
Approx
...
0

I=Prt
}



I=

I=1361
...
On March 23, 2007 Mary Anne applied for a
48000 loan at 9
...
She
promised to pay on July 12, 2007
...
Actual time, Exact Interest
b
...
time, Exact Interest
c
...
Approx
...
Actual Time, Ordinary Interest
000�
...
Approx
...
time
...
0

I=Prt

Actual

Approx
...
67

April

30

30



9

Simple Discount Formula
d=discount rate

Example:
1
...
Find the equivalent
simple interest rate
...
Discount 25000 for 3 years and 6 months at
10% simple discount
...
10x3
...
If 12300 is due at the end of 5 years at 8%
simple discount, find the proceeds and
simple discount
...
08x5)
P=7380

Proceeds

I=Fdt
I=12300x
...
Find the simple discount rate to 15% simple
interest for 240 days
...



...
29%





t=

r=



d=



+�

+
...




0
60

d=13
Title: Simple Interest (Mathematics of Investment)
Description: A compilation of formula for simple interest in the subject mathematics of investment. Easy to understand with a few example problems and solutions.