The formula we'll use for this is the simple interest formula, or:
Where:
P is the principal amount, $200.00.
r is the interest rate, 6% per year, or in decimal form, 6/100=0.06.
t is the time involved, 6....year(s) time periods.
So, t is 6....year time periods.
To find the simple interest, we multiply 200 × 0.06 × 6 to get that:
The interest is: $72.00
Usually now, the interest is added onto the principal to figure some new amount after 6 year(s),
or 200.00 + 72.00 = 272.00. For example:
If you borrowed the $200.00, you would now owe $272.00 If you loaned someone $200.00, you would now be due $272.00 If owned something, like a $200.00 bond, it would be worth $272.00 now.
