Simple interest can be easily computed using the following formula. CHAPTER 1 SIMPLE INTEREST AND SIMPLE DISCOUNT 3. Compute the amount to be repaid by borrower to the lender if simple interest is charged 5 per year.
Calculate interest on a 90-day 5000 loan at 11 using a a 360-day year and b a 365-day year.
Simple interest is interest calculated only on the initial amount that you invested. Rate of interest R A P 1 t 1frac A P frac 1 t 1 P A. As an easy example of simple interest consider how much we will get by investing R 1 000 for 1 year with a bank that pays 5 pa. CMM Subject Support Strand.