Simple Interest Formula in MS Excel

Simple Interest Formula in MS Excel

The simple interest formula in Microsoft Excel is as follows:

I = P * r * t

where:

I = the interest amount 

P = the principal amount (the initial amount of money) 

r = the interest rate (expressed as a decimal) 

t = the time period (in years)

To calculate simple interest in Excel, you can use the formula above in a cell, or use the built-in financial functions such as =FV (future value) or =IPMT (interest payment). Here's an example using the formula:

I = P * r * t 

I = $1000 * 0.05 * 2 

I = $100

So the interest amount for a $1000 principal for 2 years at 5% interest rate would be $100.