Summary for simple interest
- If a principal P is invested for T years at an interest rate of R p.a., then the total interest I is given by
I = PRT
- Remember that R is a percentage. If the interest rate is 5%, then R = 0.05.
- If the interest rate R is given per year, then T must be given in years.
- The formula has four pronumerals. If any three are known, then the fourth can be found by substitution.