Simple Interest
365
days per year
Annual
Period: From
days
To
Principle
% Rate
Interest
Total
Compound interest
Show:
prior totals
all rows
% Annual Interest Rate
Years
Periods
Periods per year (0= cont.)
Starting Balance / Present Value
Periodic payment
at end
Final Balance / Future Value
Year / Period
Initial Amount
Payment
Interest
New Balance
Financial calculations can involve simple interest or compound interest. The simple interest formula is: I= Prt, where P= the principle, r is the interest rate per period and t is the number of periods. With compound interest the interest is added to the principle and included in the interest calculation for the next period. An annuity also adds or subtracts a fixed amount from the principle. An ordinary annuity (annuity in arrears) adds the amount at the end of the period. An annuity due (annuity In advance) adds the amount at the beginning of the period. Mortgages are examples of an ordinary annuity. Common variables used are: R= the Periodic Payment Amount P= Present Value or Principle A or S= Future Value m= number of periods per year, t= number of years, n= t times m i= Interest per period, r= annual interest rate= i times m