Method Deck / finance
Simple interest
Computes simple (non-compounding) interest and the total amount owed or earned on a principal over a term.
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Inputs
- principal (number, currency units, required) min 0 : Starting amount
- annual_rate_percent (number, %, required) min 0 : Simple annual interest rate
- years (number, years, required) min 0 : Term of the loan or deposit
Outputs
- interest (currency units): Total interest accrued over the term
- total_amount (currency units): Principal plus interest
Steps
- Convert the annual rate to a decimal: r = annual_rate_percent / 100.
- interest = principal * r * years.
- total_amount = principal + interest.
- Round both interest and total_amount to 2 decimals (money to cents).
Constants
None.
Sources
- Principles of Corporate Finance (McGraw-Hill, 2026-09-30T19:31:29Z) - Standard simple interest formula I = P*r*t
Worked example and test vectors
| Name | Inputs | Answer |
|---|
| worked example | {"principal":1000,"annual_rate_percent":5,"years":3} | $1,150.00 |
| test vector: fractional year | {"principal":2500,"annual_rate_percent":4.5,"years":2.5} | $2,781.25 |
Published card
- Address:
76dfe2ce8f7f7f40fbdeb8f58b950adb
- Made at:
2026-09-30T22:39:30.722Z
- Method sha256:
30df7eda3f957ac2199ab95fe37633e5b8cfe266b53044939d7e918bcfe7e7c9