Simple Interest

[marangutan]

Is simple interest always in years?
Let's say if the question asks you for the amount received after 18 months , given the value of investment (V₀) and the percentage interest, do I just convert the months to years?

Cheers all

[Chelsea f.c.]

yes interest is generally quoted in years i.e. 2.00% p.a.

to convert to years either 1.5 years or 18/12 months pretty simple

added

it would be 1.5 times interest i.e. 2.00% times initial value

[PhoenixxFire]

It should always say on the question what the time frame for the interest is (it’ll either say per annum or p.a.), if it’s doesn’t say then you can assume it’s annual but it should say.

[marangutan]

Thank you both.
Does this also go the same with depreciation and compound interest?

[marangutan]

Thank you both.
Does this also go the same with depreciation and compound interest?

Some of the questions ask for days as well which is so confusing

[PhoenixxFire]

Thank you both.
Does this also go the same with depreciation and compound interest?

Yep

Some of the questions ask for days as well which is so confusing

Do you mean compounding each day? If so you just need to put 365 into the formula.

If you have an annual interest rate and you want a different period you just need to either divide it or multiply it.

E.g. 2%pa compounding monthly is 2/12 =0.1666666...% per month