Simple interest on savings
Use I = P * r * t to find the balance of a savings account earning simple interest. Unlimited questions, five difficulty levels, and a full worked solution every time, included free with weekly lessons.
Try one
Beatrice deposits $1500.00 into a savings account that pays 4% simple interest per year. How much will be in the account after 24 months?
I = P · r · t
Answer: $1620.00
See one solved, step by step
Ravi deposits $1000.00 into a savings account that pays 4% simple interest per year. How much will be in the account after 60 months?
I = P · r · t
📘 Worked solution
1t = 6012 = 5 yearsSimple interest formulas use time measured in years, so convert months to years.
2I = $1000.00 · 0.04 · (6012) = $200.00Multiply the principal by the annual rate (as a decimal) and the time in years - keep the time as an exact fraction so the arithmetic checks out.
3$1000.00 + $200.00 = $1200.00Add the interest earned to the original deposit for the new balance.
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