Simple interest can be calculated using the formula I = P × R × T. In a spreadsheet with principal, rate, and time in cells B2, C2, and D2, the formula is =B2*C2*D2. To get the total future amount, add the calculated interest to the principal using =B2 + B2*C2*D2.
Zoe wants to calculate simple interest using a spreadsheet with user input values for the principal (P), rate (R), and time in years (T) located in row 2. The formula for calculating simple interest (I) is:
I = P × R × T
To put this formula into a spreadsheet, you would use cell references for P, R, and T assuming they are located at B2, C2, and D2 respectively. Therefore, the spreadsheet formula for simple interest would look like:
=B2*C2*D2
Furthermore, to calculate the total future amount (A) with simple interest, you use the formula:
A = P + I
In the spreadsheet, this would translate to:
=B2 + B2*C2*D2
To practice using the simple interest formula, if Zoe inputs a principal of $100, a rate of 5%, and a time of 1 year, the calculation would be as follows:
=$100 × 0.05 × 1 = $5