That is how we calculate simple interest. Interest may be computed as simple interest which is calculated by multiplying the amount of money borrowed by the interest rate and the length of the loan. Simple Interest Equation Principal Interest A P 1 rt Where.
Principal x rate x time interest For example say you invest 100 the principal at a 5 annual rate for one year.
Simple Interest Rate Principle Rate of Interest Time Period years 100. Interest may be computed as simple interest which is calculated by multiplying the amount of money borrowed by the interest rate and the length of the loan. That is how we calculate simple interest. You see 30 is the interest Sarah will receive at the end of the tenure of her fixed deposit.
