Simple Interest Calculator
Calculate simple interest based on principal amount, interest rate, and time period.
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Results
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About Simple Interest
Simple interest is a method of calculating interest where the interest amount is calculated only on the initial principal. It does not take into account the accumulated interest of previous periods.
Formula
Simple Interest = Principal × Rate × Time
Where:
- Principal is the initial amount of money
- Rate is the interest rate per period (usually expressed as a percentage per year)
- Time is the number of periods (usually in years)
Example
If you deposit $1,000 in a savings account with a simple interest rate of 5% per year, after 3 years you would earn:
Simple Interest = $1,000 × 5% × 3 = $150
Total amount after 3 years = $1,000 + $150 = $1,150
Applications
Simple interest is commonly used in:
- Short-term loans and borrowings
- Treasury bills and bonds
- Some types of savings accounts
- Car loans and personal loans
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