Simple Interest Formula – SI = P × R × T / 100

The complete simple interest formula with variable definitions, step-by-step usage, rearrangements for P, R, and T, and three fully worked examples.

Formula

S I = \frac{P \times R \times T}{100}

Simple interest is calculated by multiplying the principal by the annual rate (as a percent) and the time in years, then dividing by 100. Interest accrues only on the original principal — it does not compound.

Variables

Symbol	Name	Description	Unit
SI	Simple Interest	The interest earned or paid over the period	$
P	Principal	The initial amount deposited or borrowed	$
R	Annual Interest Rate	The yearly interest rate expressed as a percentage	%
T	Time	The duration the money is lent or borrowed	years
A	Total Amount	Principal plus interest: A = P + SI	$

How to Use

Identify the principal (P), annual interest rate (R), and time period (T in years).
Multiply: P × R × T.
Divide by 100 to convert the percentage rate to a decimal factor.
The result is the simple interest (SI).
Add SI to P to get the total amount A.

Examples

1. P = $1,000, R = 5%, T = 2 years

S I = \frac{1000 \times 5 \times 2}{100} = \frac{10 , 000}{100} = $100

A = 1000 + 100 = $1, 100

ℹThe same $50 interest is earned each year — linear growth.

2. Find the principal: SI = $360, R = 6%, T = 4 years

Rearrange: P = (SI × 100) / (R × T)

P = \frac{360 \times 100}{6 \times 4} = \frac{36 , 000}{24} = $1, 500

ℹVerification: SI = (1,500 × 6 × 4) / 100 = $360. ✓

3. Find the rate: P = $8,000, SI = $1,200, T = 3 years

Rearrange: R = (SI × 100) / (P × T)

R = \frac{1200 \times 100}{8000 \times 3} = \frac{120 , 000}{24 , 000} = 5%

ℹThe annual interest rate is 5%.

Use the Calculator — Interactive calculator for this formula
Read the Notes — Step-by-step explanation with worked examples