What is Simple Interest

Simple interest is an interest charge that borrowers pay lenders for a loan.

How to Calculate simple interest

I=PRT

I = Interest

P= Principle ( Starting amount)

T= time ( years or months)

Steps to calculating Simple interest

1.Identify Principle (Starting amount
2. Identify your rate and change to a decimal

3. Identify your TIme.

4. Multiply (Principle X Rate X Time )

EXAMPLE

​Example: Elijah Borrows 500 dollars from the bank at a rate of 4% over a period of 3 years.

I= P X R X T

I=500 X .04 X 3

500x.04x3 = 60 ELIJAH HAS TO PAY BACK 60 DOLLARS IN INTEREST