Enter the principal amount ($) and the interest rate (%/year) into the calculator to determine the Interest Revenue. 

Interest Revenue Formula

The following formula is used to calculate the Interest Revenue. 

IR = PA * IR/100
  • Where IR is the Interest Revenue ($/year)
  • PA is the principal amount ($) 
  • IR is the interest rate (%/year) 

To calculate the interest revenue, multiply the principal amount by the interest rate.

How to Calculate Interest Revenue?

The following example problems outline how to calculate Interest Revenue.

Example Problem #1:

  1. First, determine the principal amount ($). In this example, the principal amount ($) is given as 34,000.
  2. Next, determine the interest rate (%/year). For this problem, the interest rate (%/year) is given as 12.
  3. Finally, calculate the Interest Revenue using the equation above: 

IR = PA * IR/100

The values given above are inserted into the equation below:

IR = 34,000 * 12/100 = 4080 ($/year)


FAQ

What is the principal amount in the context of interest revenue?

The principal amount refers to the initial sum of money that is either invested or loaned, upon which the interest is calculated. It is the base amount on which the interest rate is applied to determine the interest revenue over a specific period.

How does the interest rate affect interest revenue?

The interest rate, typically expressed as a percentage per year, directly impacts the amount of interest revenue generated. A higher interest rate will result in higher interest revenue for the same principal amount over the same period, while a lower interest rate will result in lower interest revenue.

Can interest revenue be calculated for periods shorter or longer than a year?

Yes, while the formula provided calculates annual interest revenue, it can be adjusted to calculate interest revenue over different periods by modifying the interest rate to reflect the specific time frame. For shorter periods, the annual interest rate can be divided accordingly, and for longer periods, it can be multiplied.