Simple Interest
I : Simple interest
P : Principal or Present value
i : Interest rate
n : Time
S : Amount
1
Khalid Hasan Rawashdeh
Annual
Interest Rate
‫نسبة الربح السنوية‬
Principal
‫رأس المال‬
Simple Interest
‫الربح البسيط‬
I = Pin
Period of Time
‫الفترة الزمنية‬
Simple Interest = Principal ( P )  Interest Rate ( i )  Time ( n )
From the following table find the simple interest
2
Problem
Principal
( P ) SR
Interest Rate
(i)
Time
(n )
1
4585
18%
4M
2
2741
8%
1Y
3
3500
12%
18 M
4
10250
6%
90 D
Khalid Hasan Rawashdeh
Simple Interest
( I ) SR
Annual
Interest Rate
‫نسبة الربح السنوية‬
Principal
‫رأس المال‬
Amount
Future Value
‫المبلغ أو القيمة‬
‫المستقبلية‬
S = P(1 + in)
Period of Time
‫الفترة الزمنية‬
Amount (S) = Pesesnt Value (P)1 + Interest Rate(i)  Time(n) 
From the following table find the simple interest
3
Problem
Present Value
( P ) SR
Interest
Rate ( i )
Time
(n )
1
2
3
4
4585
2741
3500
10250
18%
8%
12%
6%
4M
1Y
18 M
90 D
Khalid Hasan Rawashdeh
Amount
( S ) SR
Principal
‫رأس المال‬
S = P+ I
Amount
Future Value
‫المبلغ أو القيمة‬
‫المستقبلية‬
Simple Interest
‫الربح البسيط‬
Amount (S) = Principal ( P ) + Simple Interest ( i )
From the following table find the simple interest
4
Problem
Principal
( P ) SR
Simple
Interest ( I )
1
4585
275.1
2
2741
219.28
3
3500
630
6
10250
153.75
Khalid Hasan Rawashdeh
Amount
( S ) SR
Principal
‫رأس المال‬
Annual
Interest Rate
‫نسبة الربح السنوية‬
I
i =
Pn
Simple Interest
‫الربح البسيط‬
Period of Time
‫الفترة الزمنية‬
Simple Interest ( I )
Interest Rate ( i ) =
Present Value ( P )  Time ( n )
From the following table find the Simple interest ( i )
5
Problem
Principal
( P ) SR
Time
(n )
Simple Interest
( I ) SR
1
2
3
6
4585
2741
3500
10250
4M
1Y
18 M
90 D
275.1
219.28
630
153.75
Khalid Hasan Rawashdeh
Interest Rate
(i)
Simple Interest
‫الربح البسيط‬
n =
Period of Time
‫الفترة الزمنية‬
Annual
Interest Rate
‫نسبة الربح السنوية‬
I
Pi
Principal
‫رأس المال‬
Simple Interest ( I )
Time (n) =
Present Value ( P )  Interest Rate ( i )
From the following table find the Time ( n )
6
Problem
Principal
( P ) SR
Interest Rate
(i)
Simple Interest
( I ) SR
1
2
3
6
4585
2741
3500
10250
18%
8%
12%
6%
275.1
219.28
630
153.75
Khalid Hasan Rawashdeh
Time
(n)
Amount
Future Value
‫المبلغ أو القيمة المستقبلية‬
Period of Time
‫الفترة الزمنية‬
S
P=
1 + in
Principal
‫رأس المال‬
Annual
Interest Rate
‫نسبة الربح السنوية‬
Amount ( S )
Principal ( P ) =
1 + Interest Rate ( i )  Time ( n )
From the following table find the principal (P)
7
Problem
Amount
( S ) SR
Interest
Rate ( i )
Time
(n )
1
4860.1
18%
4M
2
2960.28
8%
1Y
3
4130
12%
18 M
4
10403.75
6%
90 D
Khalid Hasan Rawashdeh
Principal
( P ) SR
Simple Interest
‫الربح البسيط‬
Period of Time
‫الفترة الزمنية‬
I
P=
in
Principal
‫رأس المال‬
Principal ( P ) =
Annual
Interest Rate
‫نسبة الربح السنوية‬
Simple Interes ( I )
Interest Rate ( i )  Time ( n )
From the following table find the principal (P)
8
Problem
Simple Interest
( I ) SR
Interest
Rate ( i )
Time
(n )
1
275.1
18%
4M
2
219.28
8%
1Y
3
630
12%
18 M
4
153.75
6%
90 D
Khalid Hasan Rawashdeh
Principal
( P ) SR
Amount
Future Value
‫المبلغ أو القيمة المستقبلية‬
P=S-I
Principal
‫رأس المال‬
Simple Interest
‫الربح البسيط‬
Present Value ( P ) = Amount ( S ) - Simple Interest ( I )
From the following table find the principal (P)
Problem
9
Amount
( S ) SR
Simple Interest
(I)
1
4860.1
275.1
2
2960.28
219.28
3
4130
4
10403.75
630
153.75
Khalid Hasan Rawashdeh
Principal
( P ) SR
Exercises :-From the following table find the simple
interest
Principal
( P ) SR
Interest
Rate ( i )
Time
(n )
1
2800
12%
30
D
2
5000
45
D
3
4500
4
3600
5
720
6
640
6
M
7
570
4
M
6
M
150
Y
720
2.5
Y
337.5
3
Y
519
Y
1827
8
9
11
12
6%
120
2000
18%
4%
3460
21%
D
56.25
D
96
Khalid Hasan Rawashdeh
Amount
(S )
5025
M
8%
15%
10
10
Interest
(I)
Problem
739.2
16
589
7627
Compound Interest
S : Amount
P : Principal or Present value
i : Interest rate
n : Number of conversion period
11
Khalid Hasan Rawashdeh
Annual Interest Rate
i:
Number of Conversion Priod in One Year
Conversion Period In One Year
Annually
1
12
Semiannually
2
Quarterly
4
Khalid Hasan Rawashdeh
Monthly
12
Number of Conversion Priod
n:
Number of Months
Annually
12
13
Conversion Period In One Year
Semiannually
Quarterly
6
3
Khalid Hasan Rawashdeh
Monthly
1
Compound Amount (S) = Present Value(P) (1 + Interest Rate(i))
Time ( n )
S = P (1 + i )
n
Compound Interest ( I ) = Cmpound Amount ( S ) - Present Value ( P )
I =S-P
From the following table find the Compound Amount (S) and
Compound Interest (I)
Problem
14
Present Interest Rate
Value (P )
(i)
SR
Time
(n )
Compounded
1
2000
10%
1Y
Semiannually
2
5000
16%
2Y
Annually
3
3000
12%
6M
Quarterly
4
1000
6%
2M
Monthly
Khalid Hasan Rawashdeh
Compound
Amount (S)
SR
Compound
Interest ( I )
SR
Present Value(P) =
Compound Amount (S)
(1 + Interest Rate(i))Time ( n )
S
P=
(1 + i )n
From the following table find the present Value (P)
1
10%
1Y
Semiannually
Compound
Amount (S)
SR
2205
2
16%
2Y
Annually
6728
3
12%
6M
Quarterly
3182.7
4
6%
2M
Monthly
1010.03
Problem
15
Present Interest Rate
Value (P )
(i)
SR
Time
(n )
Compounded
Khalid Hasan Rawashdeh
Find the compound Amount ,Compound Interest and Present Value
from the following table
Problem
P
SR
Interest
Rate
(i)
Time
(n )
Compounded S
1
1500
18%
4Y
Monthly
8%
1Y
Quarterly
12%
18 M
Semiannually
6%
30 M
annually
2
3
4
16
3200
Khalid Hasan Rawashdeh
6500
2500
I