# Simple Interest Calculator

**Enter your interest rate as a decimal

P = Principal (money borrowed)

r = Rate (interest)

t = Years (time)

I = Interest Charged

## Simple Interest Formula

Interest Charged (I) =Prt

## Sample Simple Interest Problem

Jayden needs to borrow money for a new car, but he isn't sure what loan is better. If he finances his car through one bank, the dealership will sell the car to him for $500 dollars less than sticker price, they will lend him $10,500 at 6% for 4 years. The other bank will lend him $11,000 for 4 years at 5%. Which loan is in his best interest (HA! no pun intended).

Bank 1:

p = $10,500

r = .06

t = 4

The results show interest charged is: $2520 (don't forget to enter the % in decimal form ie,.06)

Bank 2:

p = $11,000

r = .04

t = 4

The results show interest charged is: $2,220.

If Mike goes with bank 1, he will pay $13,020, if he goes with bank 2 he will pay $13,220. Bank 1 is the better deal.