How to Calculate Simple Interest
The expression "basic" signifies you are working with the easiest method of computing interest. When you see how to compute a straightforward premium, you can proceed onward to different computations, such as yearly rate yield (APY), yearly rate (APR), and progressive accrual. Let us assume you contribute $100 (the head) at a 5% yearly rate for one year. The straightforward interest figuring is: $100 x 0.05 x 1 = $5 straightforward interest for one year Note that the loan cost (5%) shows up as a decimal (.05). To do your own calculations, you may need to change rates over to decimals. A simple stunt for recalling this is to consider the word percent "per 100." You can change over a rate into its decimal structure by partitioning it by 100. Or on the other hand, simply move the decimal direct two spaces toward the left. For instance, to change over 5% into a decimal, partition 5 by 100 and get .05.