R Rate of Interest per year in decimal. For the above calculation you have 450000 to invest or borrow with a rate of 95 percent for a six-year period of time. Owners should calculate the statement of retained earnings at the end of each accounting period even if the amount of dividends issued was zero.
Amount due after 5 yearsPrincipal Simple Interest 50002500.
Using the formula above lets look at an example where you have 5000 and can expect to earn 5 interest on that sum each year for the next two years. T Time Periods involved. Using the prior example of a 1000 account with a 10 rate after 3 years the balance would be 1300. So now we will do the calculation this using the simple interest equation ie.
