![]() Now that you know your total interest, you can use this value to determine your total loan repayment required. Then, you'd multiply this value by the number of years on the loan, or $500 × 5 = $2,500. To start, you'd multiply your principal by your annual interest rate, or $10,000 × 0.05 = $500. You want to know your total interest payment for the entire loan. Let's review a quick example of both I=Prt and I=Prn.įor example, let's say you take out a $10,000 loan at 5% annual simple interest to repay over five years. For instance, if you wanted to calculate monthly interest taken on a monthly basis, then you would input the monthly interest rate as "r" and multiply by the "n" number of periods. Under this formula, you can calculate simple interest taken over different frequencies, like daily or monthly. Simple Interest for Different Frequencies For instance, if you wanted to calculate interest over six months, your "t" value would equal 0.5. Under this formula, you can manipulate "t" to calculate interest according to the actual period.
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