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Please can someone explain this simple interest formula.

2006-06-14 18:25:43 · 4 answers · asked by Anonymous in Science & Mathematics Mathematics

4 answers

(1 + rt)P = A
1+rt = A/P
rt = (A/P - 1) 1/t

the answer

r= A/Pt - 1/t

2006-06-14 18:34:51 · answer #1 · answered by J 1 · 0 0

P = A/(1 + rt)

P/A = 1/(1 + rt)

A/P = 1 + rt

(A/P) - 1 = rt

(A - P)/P = rt

r = (A - P)/Pt

Simple interest is interest which is paid only on the principal and not on the additional amount generated by previous interest payments.

In other words, simple interest is interest that accrues linearly. That is, it grows by a certain fraction of the principal per time period. Calculation of accrued interest of most debt uses simple interest. Once an interest payment is made, the lender can reinvest it elsewhere. In case they reinvest it in the original investment, interest will start accruing on this interest. In this case, they can calculate the growth of their investment using the compound interest method.

2006-06-15 01:54:24 · answer #2 · answered by JoseABDris 2 · 1 0

r=((A/P)-1)/t

2006-06-15 01:32:04 · answer #3 · answered by Keith H 2 · 0 0

P = A/(1 + rt)
1 + rt = (A/P)
rt = (A/P) - 1
rt = (A - P)/P
r = (A - P)/(PT) or (A/(PT)) - (1/T)

2006-06-15 13:39:14 · answer #4 · answered by Sherman81 6 · 0 0

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