Finite Math Examples Mathematics of Finance

Find the Simple Interest Received

$p = 8000$ , $r = 10 %$ , $t = 5$

Step 1

Simple interest is calculated on the original principal only. Accumulated interest from prior periods is not used in calculations for the following periods.

$i = p \cdot r \cdot t$

Step 2

Solve the equation for $i$ .

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Step 2.1

Remove parentheses.

$i = p \cdot r \cdot t$

Step 2.2

Multiply $p r$ by $t$ .

$i = p r t$

Step 3

Substitute the known values into the formula.

$i = (8000) \cdot (10 %) \cdot (5)$

Step 4

Simplify the right side.

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Step 4.1

Simplify $(8000) \cdot (10 %) \cdot (5)$ .

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Step 4.1.1

Convert $10 %$ to a decimal.

$i = 8000 \cdot 0.1 \cdot 5$

Step 4.1.2

Multiply $8000 \cdot 0.1 \cdot 5$ .

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Step 4.1.2.1

Multiply $8000$ by $0.1$ .

$i = 800 \cdot 5$

Step 4.1.2.2

Multiply $800$ by $5$ .

$i = 4000$

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Find the Simple Interest Received

Mathematics of Finance

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