Reverse Interest Calculator

Formula

To calculate the principal amount:

\[ P = \frac{A}{(1 + r)^n} \]

Where:

$ P $ is the principal amount (\$)
$ A $ is the accumulated amount (\$)
$ r $ is the interest rate per period (decimal)
$ n $ is the number of periods

Reverse Interest Definition

A reverse interest is a process of calculating a principal amount on an investment or loan given the accumulated amount, interest rate per period, and a number of periods.

Example Calculation

Let's assume the following values:

Accumulated Amount $ A $ = \$1000
Interest Rate per Period $ r $ = 0.05
Number of Periods $ n $ = 10

Step 1: Calculate $ (1 + r)^n $:

\[ (1 + 0.05)^{10} = 1.62889 \]

Step 2: Divide the accumulated amount by the result from step 1:

\[ P = \frac{1000}{1.62889} = 613.91 \]