A = P(1 + rt)
Where:
A = Total Accrued Amount (principal + interest)
P = Principal AmountI = Interest Amount
r = Rate of Interest per year in decimal;
r = R/100
R = Rate of Interest per year as a percent;
R = r * 100
t = Time Period involved in months or years
Calculation:
First, converting R percent to r a decimal
r = R/100 = 6.5%/100 = 0.065 per year,
putting time into years for simplicity,
30 months ÷ 12 months/year = 2.5 years,
then, solving our equation
A = 1800(1 + (0.065 × 2.5)) = 2092.5 A = $ 2,092.50
The total amount accrued, principal plus interest,
from simple interest on a principal of $ 1,800.00
at a rate of 6.5% per year
for 2.5 years (30 months) is $ 2,092.50.
