MANIPULATING THE SIMPLE

INTERST FORMULA
Mrs Finlay
September 2015

Simple interest formula is:

I=Prt

This basic formula for simple interest-only finds I, the

simple interest
where P is the Principal amount of money to be
invested
at an Interest Rate R% per period for
t Number of Time Periods.
Where r is in decimal form; r=R/100.

If we want to find some other part of the formula that we

do not know we have to change the order of the formula.
If we know the principal, the rate, the amount of interest
but not the time we need to rearrange the formula so that
time is by itself.
If a question told you that the interest was $200, the
principal was
$20.000 and the rate was 1.5% the question may ask you
to calculate or solve for time.
To do this we need to rearrange the formula I=Prt.
We need the t by itself. We divide the Prt by Pr so that t
is left by itself and what we do to one side of the formula
we do exactly the same to the other so the I is also
divided by Pr, or multiplied by the reciprocal. Our new

The rules we applied on the first formula change we now apply

again to change the formula so we can find r if a question went
as follows:
Mary invested $3000 in a GIC for 3 years that paid out interest
of $78.50 each year. What is the rate on this investment
The formula is I=Prt.
We want the r by itself so we multiply each side by the
reciprocal of Pt and we get r = I / Pt
The solution would be r=$78.50 divided by $3000 x 1
Answer Interest rate is 2.62% rounded to the nearest decimal

To find the principal in a simple interest

question we again need to get P by itself. To
do this we look at the formula
I=Prt and now know that we need to multiply
each side by the reciprocal of rt which leave
us with the finished formula P = I / rt

Rules for manipulating formulas.

RULE #1: you can add, subtract, multiply and divide by anything, as long as you do
the same thing to both sides of the equals sign. In an equation, the equals sign
acts like your mother saying Share equally: if you add 5 of something to one side of the
balance, you have to add the same amount to the other side to keep the balance steady.
The same thing goes for an equation - doing the same operation to both sides keeps the
meaning of the equation from changing.
RULE #2: to move or cancel a quantity or variable on one side of the equation, perform
the "opposite" operation with it on both sides of the equation. For example if you had
g-1=w and wanted to isolate g, add 1 to both sides (g-1+1 = w+1). Simplify (because (1+1)=0) and end up with g = w+1.
Remember you are trying always to get the unknown variable by itself on one side of the
equals sign and all the other variables on the other side eg. 6x + 4 = 76. Solve x
To solve this question we want x by itself. First we subtract 4 from each side to give us
6x+4-4=76-4
We now have 6x = 72
Divide each side by 6 so that 6x/6 = 72/6
Answer x = 12