# Simple Interest Calculator

P (Initial Investment) : \$

r (Interest Rate) :

t (Time Accrued) :

Interest Charged =   \$

**Enter your interest rate as a decimal

P = Principal (money borrowed)

r = Rate (interest)

t = Years (time)

I = Interest Charged

## Simple Interest Formula

Interest Charged (I) =

Prt

## Sample Simple Interest Problem

Jayden needs to borrow money for a new car, but he isn't sure what loan is better. If he finances his car through one bank, the dealership will sell the car to him for \$500 dollars less than sticker price, they will lend him \$10,500 at 6% for 4 years. The other bank will lend him \$11,000 for 4 years at 5%. Which loan is in his best interest (HA! no pun intended).

Bank 1:
p = \$10,500
r = .06
t = 4

The results show interest charged is: \$2520 (don't forget to enter the % in decimal form ie,.06)

Bank 2:
p = \$11,000
r = .04
t = 4
The results show interest charged is: \$2,220.
If Mike goes with bank 1, he will pay \$13,020, if he goes with bank 2 he will pay \$13,220. Bank 1 is the better deal.