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Calculating simple interest

Learning to calculate simple interest is an important first step in building up to calculating the price of a bond.

Here you will apply what you have learned to calculate simple interest on a savings account.

A savings account offers a 3% interest rate (simple interest) per year paid yearly. You decide to invest USD 10,000 in this account for a period of 10 years.

This exercise is part of the course

Bond Valuation and Analysis in Python

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Exercise instructions

  • Assign the present value, rate, and number of periods to pv, r, and n, respectively.
  • Using the formula for simple interest, calculate and print the total amount of simple interest earned after 10 years.
  • Calculate and print the value of the account after 10 years.

Hands-on interactive exercise

Have a go at this exercise by completing this sample code.

# Assign present value, rate and number of periods
pv = ____
r = ____
n = ____

# Calculate total amount of simple interest earned
simple_interest = ____
print(simple_interest)

# Calculate value of the savings account
fv = ____
print(fv)
Edit and Run Code