Simple Interest Calculation
The interest calculation is an application of the percentage calculation.
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Remember
By using the interest calculation, you usually have to use different terms.
- Original value $w$ → principal $P$
- Percentage value $p$ → interest amount $I$
- Percentage rate $r\%$ → interest rate $r\%$
The formulas don’t change:
$P=\frac{I}{r\%}$
$I=r\%\cdot P$
$r\%=\frac{I}{P}$
$I=r\%\cdot P$
$r\%=\frac{I}{P}$
Example
Lena has 200 € in her passbook with an interest rate of 5 percent. What are the interest rates in a year?
It is given: $P=200€$ und $r\%=5\%$
$I=r\%\cdot P$
$I=5\%\cdot 200€$ $=\frac{5}{100}\cdot200€$ $=10€$