What is Simple Interest? Definition, Formula, and Examples Story by [email protected] (Libby Kane, CFEI) • 1w ...

The formula for simple interest requires your initial principal balance, annual interest rate, and time in years. Alyssa Powell/Insider Variables in a formula To use a simple interest calculator ...

For example, if you take out a five-year loan for $20,000 and the interest rate on the loan is 5 percent, the simple interest formula would be $20,000 x .05 x 5 = $5,000 in interest.

Here’s how a simple interest calculator work A simple interest rate calculator has a formula box, as described above. The inputs entered here are used in the mathematical formula: A = P (1+rt), where ...