Simple Interest Formula

Also known as: Basic Interest Formula

I = P \times r \times t

I = P × r × t

What It Calculates

Calculates interest earned on the original principal only — interest does not compound.

Symbol	Name	Unit	Description
I	Interest	$	Total interest earned or paid
P	Principal	$	The initial amount
r	Annual Rate	decimal	Annual interest rate as a decimal
t	Time	years	Time period in years

1I = 1000 × 0.06 × 3

2I = $180

Result: $180

A = P(1 + r/n)^(nt)

PV = FV / (1 + r/n)^(nt)

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