Three things are needed to calculate
simple interest:
Principle
= the amount put into the bank or
the amount borrowed from the bank
Rate = the percent
Time = how many years
the money is in the savings account at the bank or how many years
it will take you to pay back the loan.
The formula for calculating interest is very simple:
Simple Interest
= Principle x Rate x Time (in years)
The tricky part about
calculating the interest is the time aspect. The time must be
in years. If the time is given in months, simply divide your
months by 12. This is because there are 12 months in a year.
