Simple Interest Formula

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Lesson Objective
In this lesson, we will learn about the simple interest formula and the maturity value formula... 
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About This Lesson
In this lesson, we will:
  1. Learn about the basics behind simple interest.
  2. See the steps to derive the simple interest formula.
    (1st math video).
  3. See the steps to derive the maturity value formula.
    (2nd math video).
The study tips and math videos below will explain more.
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Study Tips

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Tip #1
The formula for finding the simple interest, I is given below:
simple interest formula
Where:   
  1. P is the principal (the amount of money borrowed)
  2. r is the interest rate (per year or per annum)
  3. t is the loan duration in years.
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Tip #2
The formula to find the maturity value, S is given below:
maturity value formula
Where the definition for P, r and t are the same as above.
The math videos below will explain the basics and the steps to derive these two formulas. You can see the examples on using these formulas here.

Math Video

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Video on Simple Interest Formula
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Video on Maturity Value Formula
 
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Math Video Transcript

Practice Questions & More

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Multiple Choice Questions (MCQ)
Now, let's try some MCQ questions to understand this lesson better.

You can start by going through the series of questions on simple interest formula or pick your choice of question below.
  1. Question 1 on the using the simple interest formula
  2. Question 2 on using the maturity value formula
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