PanMaths.comFree Printable Math Formula Reference Sheet
Simple Interest Formula
Financial Math • Grades 6, 7, 8, 9
Financial Math
Simple Interest Formula
Calculate interest earned or owed with I = Prt and total accumulated balance A = P(1+rt).
The Formula
I = P × r × t
Used for: Calculating simple interest earned on investments or charged on loans over time
IInterest amount earned or owed
PPrincipal starting amount
rAnnual interest rate (decimal = % / 100)
tTime period in years
ATotal balance: P + I = P(1 + rt)
⚡Live Interactive Quick Solver
Instant CalculationTotal Amount (A):$1,150.00
Interest Earned (I = Prt): $150.00• Step: I = 1000 × 0.05 × 3 = $150.00
I = P \cdot r \cdot t, \quad A = P(1 + rt)
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🎯 Key Concepts & Rules
Essential principles for calculating with this formula:
💵
I = P × r × tPrincipal (P) × Annual Rate (r) × Time in Years (t).
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Total Balance: A = P + IFinal amount equals starting principal plus total interest.
📝 Worked Examples & Step-by-Step Solutions
Example 1: $2,000 at 5% for 3 Years
Problem:
P = $2,000, r = 5% (0.05), t = 3 years.1
Calculate Interest
I = 2000 × 0.05 × 3 = $3002
Total Amount
A = 2000 + 300 = $2,300Answer: Interest = $300, Total = $2,300
💡 Pro Tips & Common Mistakes
Rate Must Be Decimal
Always divide percentage by 100 (5% ➔ 0.05).
Time Must Be in Years
If time is given in months, divide by 12 (e.g. 6 months = 0.5 years).
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