The formula for simple interest is i=prt. Interpreted, simple interest equals principal (the original amount borrowed), multiplied by the interest rate as a decimal, multiplied by time (measured in years).

To compute simple interest, you need to know the interest rate and the time period for that rate. Multiply the interest rate times the principal times the number of periods. A $200 loan at %5/year for 3 years = $200 x .05 x 3 = $10 x 3 = $30.