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# simple interest

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Pencil and paper, and using fractions instead of decimals, helps with a lot of problems I have found. Ill stick to your format, fractions have always been pleasant to work with. You rounded an intermediate calculation which they warned you not to do , and that threw you off. Use of this site constitutes acceptance of our User Agreement and Privacy Policy. Log in or sign up in seconds. Submit a new text post.

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You must show some work or thought. To view LaTeX on reddit, install one of the following: Custom superscript and subscripts: When a friend, family member or bank lends you money, they are taking a risk that you might not pay back the loan.

Interest is a commonly accepted way of compensating lenders for the risk they take in lending. In many cases, borrowing money from a bank may involve compound interest. Melissa wants to open a small bakery and needs a loan to buy equipment, supplies and to hire staff. Based on her business plan, she thinks the bakery will start to make substantial profits after four years of operation.

Melissa asks for a loan from Johan, an old friend, who runs a bakery in a nearby city. Melissa and Johan agree to the following terms.

How much interest will Melissa have to pay at the end of the loan? The concept of simple interest can also be used to make investment decisions. This means that you will not earn an interest on your interest.

This calculator can be used to solve various types of simple interest problems. The calculator will print easy to understand step-by-step explanation. Click here to see a list of example problems that can be solved by using this calculator. Enter principal, interest rate and time to calculate how much money you will get at the end of the investment time.

The calculator will generate an explanation on how the calculation process is done. Select variable you want to find and enter known variables.

The calculator will find unknown variable and it will generate an explanation on how the calculation is done. You left the money in for 3 years. Find the interest earned and the amount at the end of those 3 years?

## Main Topics

Interest is the amount paid by the borrower to the lender or is the money earned on the deposited funds. Simple interest is the most basic type of interest.

### Privacy FAQs

Simple interest is a basic way to calculate interest. In fact, your interest – whether you’re paying it or earning it – is usually calculated using different methods. However, simple interest is a method that gives us a general idea of what a loan will cost or what an investment will give us.