I Part (With My Money)

Calculating simple interest? Think of parting with your money. (Parting, in this case, is not always such sweet sorrow.)

The formula for calculating simple interest is...........

i = prt         (I part). 

I is the interest.

R stands for "rate". 

T stands for time period.

i = p X r X t

P stands for principal. This is a fancy term for the chunk of money you are talking about. (You borrow $2000.00 or you invest $3000.00. This is your principal. So...

If you are investing that $3000.00 over 2 years at 1% interest rate, you work it out like this... (Don't forget to convert your 1% to decimal form (0.01)

i = prt

i = 3000.00 x (0.01) x 2

i = $60.00

When you invest, you part with your money for 2 years and you are rewarded with $60.00.

If you are borrowing that $3000.00 over 2 years at 1% interest rate, you pay the bank $60.00 for lending you the money in the first place. You part with that $60.00 when you pay it to the bank.