Simple Interest Formula
Interest is computed once, on the original principal, then accrues at the same flat amount each period.
The formula
Bₙ = B₀ + n · R · B₀
Interest calculated linearly on the original principal — no compounding.
What goes into it
- Initial borrowed capital (B₀)
- Number of periods (n)
- Interest rate per period (R, %)
Worked example
| Principal (B₀) | $100 |
| Rate / period (R) | 7% |
| Periods (n) | 5 |
| Balance B₅ | $135 |