Financial Mathematics · JSS 3
Simple interest
Find the interest on a loan or savings when interest is only paid on the starting sum.
- I = PRT100
- Amount A = P + I
What the letters mean
- I
- the interest
- P
- the principal (the amount borrowed or saved)
- R
- the rate per cent per year
- T
- the time in years
Worked example
Find the simple interest on ₦50,000 at 8% per year for 3 years.
Step 1: Put in the formula
I = 50,000 × 8 × 3100
Step 2: Work it out
= ₦12,000 (so the amount is ₦62,000)
Final answer: ₦12,000
Time in months? Divide by 12 to get years.
See it
Play with this picture from the Simple Interest lesson.
Years →PrincipalInterest: the same ₦1,000 every year
Principal P₦20,000
Rate R5%
Time T3 yrs
I = PRT ÷ 100 → 20,000 × 5 × 3 ÷ 100 = ₦3,000
A = P + I = ₦20,000 + ₦3,000 = ₦23,000