We have two cases below
- Simple interest
A=P(1+jn)
where A is the accumulated amount, P is the principal amount, j is interest rate and n is the time period.
We can make j subject of the formula to get the unknown interest rate j as follows
A=P(1+jn)
A=P+Pjn
P+Pjn=A
Pjn=A−P
PnPjn=PnA−P
∴j=PnA−P
2.Compound interest
A=P(1+j)n
P(1+j)n=A
PP(1+j)n=PA
(1+j)n=PA
(n1+j)n=nPA
1+j=nPA
∴j=nPA−1
Comments