Simple interest formula: I = Prn / 100
The simple interest formula is I = P × r × n / 100.
What each letter means
- \(I\) the interest earned
- \(P\) the principal: the amount invested
- \(r\) the percentage rate per year
- \(n\) the number of years
When to use it
When the interest each year is worked out on the original amount only, so you earn the same interest every year.
Worked example
$1500 is invested at 4% per year simple interest for 6 years. Find the total value at the end.
- \(I=\dfrac{1500\times4\times6}{100}=360\)
- Total \(=1500+360\)
Answer: $1860
Common mistake
Giving the interest when the question asks for the total. The total amount is P + I.
On your course
| Course | In the exam |
|---|---|
| Cambridge 0580 | Not given: learn it |
From our own IGCSE Maths formula sheets, in our words. Official: Cambridge's 0580 syllabus (PDF).
Practise and revise
- Practise 0580 percentages questions
- Practise 4MA1 percentages questions
- Revise Number notes
- Print Cambridge 0580 one-page formula sheet
Questions
What is the simple interest formula?
The simple interest formula is I = P × r × n / 100. I: the interest earned; P: the principal: the amount invested; r: the percentage rate per year; n: the number of years.
Is the simple interest given in the exam?
Cambridge 0580: not given: learn it. This comes from our own IGCSE Maths formula sheets; your teacher has the official booklet.
How do I find the total amount with simple interest?
Work out the interest I = Prn/100, then add it to the amount invested: total = P + I.
Our own wording, examples and card, checked by IGCSE Math Revision. Not produced or endorsed by Pearson Edexcel.