# Simple Interest Calculator

**Enter values to calculate:**

## What is Simple Interest?

- Simple interest is calculated only on the principal amount or on the portion of the principal amount that is remained.
- Simple interest is a type of interest which once credited does not earn interest on itself. It remains fixed over time.
- It does include the compounding factor.
- The Principal amount is constant while calculating simple interest.
- Majority of the loans are usually simple interest loans.

## Simple Interest formula:

**A = P(1 + rt)**

Where:

**A** = Maturity Amount (principal + interest)

**P** = Principal Amount

**I** = Interest Amount

**r** = Rate of Interest in decimal;** r** = R/100

**t** = Time Period

**Example:** An amount of **$1,000** is deposited in a bank paying an annual interest rate of **5%**. What is the balance after **6 years**?

Here,

P = $ 1000

r = 5/100 or 0.05%

t = 6 Years

A = P(1 + rt)

A = 1000 (1 + 0.05 x 6 )

A = 1000 (1.3)

A = **1300**

Balance after **6 years** would be **$1300**, where **$300** is the interest earned.