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.