To calculate simple interest in Excel, you need to use a simple formula. In this formula, you need to have the principal amount, interest rate, and term period of the interest and then you need to multiply all of these with each other to get the final interest amount in the result.
In the following example, we have values you can use to calculate the interest.
Steps to Calculate Simple Interest
- First, in a cell enter a “=” sign.
- Next, refer to the principal amount and enter an asterisk sign to multiply.
- After that, refer to the interest rate (which should be in a percentage value).
- Now, again enter an asterisk to multiply and refer to the term’s value.
- In the end, hit enter to the simple interest value in the cell.
So, the following is the formula, that we have used in this calculation.
To understand this formula and the interest returned by it. We need to split it into five parts as we have used five years as a term for the calculation.
As we are calculating simple interest each year in the term get an equal It returns 350000 in the result, which means 70000 per year as we have used 5 years. That means 350000/5 = 70000 per year.