Calculate the Due Simple Interest Earned by a Principal of 450.00 (Dollar, Euro, Pound). Annual Interest Rate: 3.00%. Duration Period: 5 years, 2 months and 28 days. Transaction Fee Rate: 3.00%
Calculation method used. Calculation formula. Used notations
[1] Calculation method used: 30 / 360
Number of days in a month
30
Number of days in a year
360
[2] Simple interest. Calculation formula:
I = (P × r × t) ÷ 360
[3] Simple interest. Used notations:
- I = Simple interest amount - To be calculated.
Amount accrued as simple interest on the amount lent, deposited or borrowed. - 360 = Number of days in a year
- P = Principal - initial starting amount lent, deposited or borrowed
P = 450.00 units (Dollar, Euro, Pound) - r = Annual simple interest rate
r = 3.00% - t = Duration period of the investment, in days
t = 5 years, 2 months and 28 days - t = 5 years × 360 days / year + 2 months × 30 days / month + 28 days
t = 1,888 days
» Simple Interest: what is it, how is it calculated?
Calculate the simple interest amount
[4] Substitute for the values
in the Simple Interest formula:
I =
(P × r × t) ÷ 360 =
(450.00 × 3.00% × 1,888) ÷ 360 =
450.00 × 3.00 ÷ 100 × 1,888 ÷ 360 =
(450.00 × 3.00 × 1,888) ÷ (360 × 100) =
2,548,800.00 ÷ 36,000 =
70.80
The Future Value and Project Breakdown
[5] The Future Value (accumulated value) of the investment:
- F = The Future Value of the investment is calculated by adding the calculated simple interest amount to the principal.
- The Future Value of the investment is also called the accumulated value of the investment.
F = P + I =
450.00 + 70.80 =
520.80
[6] Project Breakdown. Monthly
The simple interest is evenly distributed along the months that make up the project
| Month | Days | Interest | Total interest | Balance |
|---|---|---|---|---|
| 0 | 0 | -- | -- | 450.00 |
| 1 | 30 | 1.13 | 1.13 | 451.13 |
| 2 | 30 | 1.13 | 2.25 | 452.25 |
| 3 | 30 | 1.13 | 3.38 | 453.38 |
| 4 | 30 | 1.13 | 4.50 | 454.50 |
| 5 | 30 | 1.13 | 5.63 | 455.63 |
| 6 | 30 | 1.13 | 6.75 | 456.75 |
| 7 | 30 | 1.13 | 7.88 | 457.88 |
| 8 | 30 | 1.13 | 9.00 | 459.00 |
| 9 | 30 | 1.13 | 10.13 | 460.13 |
| 10 | 30 | 1.13 | 11.25 | 461.25 |
| 11 | 30 | 1.13 | 12.38 | 462.38 |
| 12 | 30 | 1.13 | 13.50 | 463.50 |
| 13 | 30 | 1.13 | 14.63 | 464.63 |
| 14 | 30 | 1.13 | 15.75 | 465.75 |
| 15 | 30 | 1.13 | 16.88 | 466.88 |
| 16 | 30 | 1.13 | 18.00 | 468.00 |
| 17 | 30 | 1.13 | 19.13 | 469.13 |
| 18 | 30 | 1.13 | 20.25 | 470.25 |
| 19 | 30 | 1.13 | 21.38 | 471.38 |
| 20 | 30 | 1.13 | 22.50 | 472.50 |
| 21 | 30 | 1.13 | 23.63 | 473.63 |
| 22 | 30 | 1.13 | 24.75 | 474.75 |
| 23 | 30 | 1.13 | 25.88 | 475.88 |
| 24 | 30 | 1.13 | 27.00 | 477.00 |
| 25 | 30 | 1.13 | 28.13 | 478.13 |
| 26 | 30 | 1.13 | 29.25 | 479.25 |
| 27 | 30 | 1.13 | 30.38 | 480.38 |
| 28 | 30 | 1.13 | 31.50 | 481.50 |
| 29 | 30 | 1.13 | 32.63 | 482.63 |
| 30 | 30 | 1.13 | 33.75 | 483.75 |
| 31 | 30 | 1.13 | 34.88 | 484.88 |
| 32 | 30 | 1.13 | 36.00 | 486.00 |
| 33 | 30 | 1.13 | 37.13 | 487.13 |
| 34 | 30 | 1.13 | 38.25 | 488.25 |
| 35 | 30 | 1.13 | 39.38 | 489.38 |
| 36 | 30 | 1.13 | 40.50 | 490.50 |
| 37 | 30 | 1.13 | 41.63 | 491.63 |
| 38 | 30 | 1.13 | 42.75 | 492.75 |
| 39 | 30 | 1.13 | 43.88 | 493.88 |
| 40 | 30 | 1.13 | 45.00 | 495.00 |
| 41 | 30 | 1.13 | 46.13 | 496.13 |
| 42 | 30 | 1.13 | 47.25 | 497.25 |
| 43 | 30 | 1.13 | 48.38 | 498.38 |
| 44 | 30 | 1.13 | 49.50 | 499.50 |
| 45 | 30 | 1.13 | 50.63 | 500.63 |
| 46 | 30 | 1.13 | 51.75 | 501.75 |
| 47 | 30 | 1.13 | 52.88 | 502.88 |
| 48 | 30 | 1.13 | 54.00 | 504.00 |
| 49 | 30 | 1.13 | 55.13 | 505.13 |
| 50 | 30 | 1.13 | 56.25 | 506.25 |
| 51 | 30 | 1.13 | 57.38 | 507.38 |
| 52 | 30 | 1.13 | 58.50 | 508.50 |
| 53 | 30 | 1.13 | 59.63 | 509.63 |
| 54 | 30 | 1.13 | 60.75 | 510.75 |
| 55 | 30 | 1.13 | 61.88 | 511.88 |
| 56 | 30 | 1.13 | 63.00 | 513.00 |
| 57 | 30 | 1.13 | 64.13 | 514.13 |
| 58 | 30 | 1.13 | 65.25 | 515.25 |
| 59 | 30 | 1.13 | 66.38 | 516.38 |
| 60 | 30 | 1.13 | 67.50 | 517.50 |
| 61 | 30 | 1.13 | 68.63 | 518.63 |
| 62 | 30 | 1.13 | 69.75 | 519.75 |
| 63 | 28 | 1.05 | 70.80 | 520.80 |
| Month | Days | Interest | Total interest | Balance |
Transaction Fee Amount. Financial Gain (net profit)
[7] Amount charged as a Transaction Fee
- Fee = Transaction Fee Amount is calculated as a percentage of the Future Value.
- This percentage is called Fee Rate = Fee%.
Fee = Fee% × F
Fee =
Fee% × F =
3% × 520.80 =
3/100 × 520.80 =
(3 × 520.80)/100 =
1,562.4/100 =
1,562.4 ÷ 100 =
15.624 ≈
15.62
[8] Financial Gain (net profit):
- Pr = Financial Gain (the net profit) is calculated as the difference between Simple Interest Amount, I, and Transaction Fee Amount, Fee.
Pr = I - Fee
Pr =
I - Fee =
70.80 - 15.62 =
55.18
Calculate the net amount left after deducting the Transaction Fee Amount
[9] Net Amount. Only in the case of a (bank) deposit
- N = The Net Value is calculated by subtracting the Fee Amount from the Future Value.
N = F - Fee
N =
F - Fee =
520.80 - 15.62 =
505.18
Calculate the Total Cost of borrowing
[10] Total Cost. Only in the case of a (bank) loan
- TC = The Total Cost of a borrowing is calculated by adding the Transaction Fee Amount to the Future Value.
TC = F + Fee
TC =
F + Fee =
520.80 + 15.62 =
536.42
Answer:
Principal
450.00
Simple Interest Amount
70.80
Future Value
520.80
Transaction Fee Amount
15.62
Financial Gain (net profit)
55.18
Net Amount
505.18
Total Cost
536.42