Simple interest is calculated solely on the amount initially invested. This calculator can help you deal with many different kinds of simple interest problems. The calculator prints an easy-to-follow, step-by-step explanation.
problem
You deposit $1000 into a bank account, that pays 7% simple interest per year. You left the money in there for 3 years. Determine the interest earned and the total amount at the end of those 3 years.
solution
The interest is $210 and the amount is $1210.
explanation
STEP 1: Find the interest by using the formula $ I = P \cdot i \cdot t $, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.
In this examplee P = $1000, i = 7% and t = 3 years, so
$$ \begin{aligned} I &= P \cdot i \cdot t \\ I &= 1000 \cdot 0.07 \cdot 3 \\ I &= 210 \end{aligned}$$STEP 2: Find the amount by using the formula $ A = P + I $.
Since P = $1000 and I = $210 we have
$$ \begin{aligned} A &= P + I \\ A &= 1000 + 210 \\ A &= 1210 \end{aligned} $$Please tell me how can I make this better.