Interest Calculation

Description of the calculation of Interest with examples


The interest calculation is an extension of the percentage calculation. Interest is a percent value of one underlying or principal.

Base of the percentage calculation is the formula \(\displaystyle \frac{Z}{K}=\frac{P}{100}\)


  • \(Z\) = Interest
  • \(K\) = Principal
  • \(P\) = Interest rate

The formula can be changed for the value you are looking for

Interest    


Principal   


Interest rate  


Calculate interest income


This example calculates the interest earned on investing \(3000\) for one year at a fixed rate of \(3\%\).

Given is the interest rate \(P = 3\) and the capital = \(3000\).

We are looking for the interest income \(Z\).

The interest income is calculated according to the formula


Calculate interest rate


This example calculates the interest rate, which is required to receive \(150$\) interest in one year, from a capital of \(3000$\).

The capital \(K = 300\) and the interest income \(Z = 150\) are known.

We are looking for the interest rate \(P\).

Calculated according to the formula


Calculate starting capital


What amount must be invested in order to receive an interest income of \(200$\) at a rate of \(5%\)? This question should be solved in this task.

he interest rate of \(P = 5\%\) and the interest income \(Z = 200$\) are known

We are looking for starting capital \(K\).

It is calculated according to the formula


Calculate interest income daily


For example, suppose you want to invest \(5000$\) for \(2\) months at an annual interest rate of \(5\%\). For this, the interest must be calculated on a daily basis. The formula for calculating the interest income is extended accordingly by the number of \(Tage = t\). For each month, 30 days, so 360 days for 1 year are assume.

The capital \(K = 5000\), the interest rate \(P = 5\) and the number of days \(t = 60\) are known

We are looking for interest income \(Z\).

This is calculated


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