Simple Interest Calculator

Calculate simple interest using the formula SI = P × R × T / 100

Investment Details

Initial amount: $10000
Annual interest rate: 5%
Investment period: 2 years
Formula Used:
Simple Interest = (P × R × T) / 100
P = Principal, R = Rate, T = Time

Results

Simple Interest Earned
$1000
Total Amount
$11000

Breakdown

Principal
$10000
Interest
$1000
Calculation:
SI = (10000 × 5 × 2) / 100
SI = $1000

Disclaimer

This simple interest calculator uses the basic formula SI = P × R × T / 100. For compound interest calculations, use our compound interest calculator. Results are for educational purposes.

What is Simple Interest?

Simple interest is calculated using the formula: Interest = Principal × Rate × Time. It's the most basic form of interest calculation where interest is earned only on the original principal amount.

Unlike compound interest, simple interest doesn't earn interest on previously earned interest, making calculations straightforward and predictable.

Simple Interest Formula

Interest = (P × R × T) / 100

P = Principal

The initial amount of money

R = Rate

Annual interest rate (%)

T = Time

Time period in years

Applications of Simple Interest

Personal Loans

Calculate interest on car loans, personal loans, and short-term borrowing.

Savings Accounts

Estimate earnings from basic savings accounts and certificates of deposit.

Investment Planning

Quick calculations for bonds, treasury bills, and fixed-income investments.

Frequently Asked Questions

What's the difference between simple and compound interest?

Simple interest is calculated only on the principal amount, while compound interest is calculated on both principal and accumulated interest.

When is simple interest used?

Simple interest is commonly used for short-term loans, car loans, and some types of bonds and savings accounts.

How do I calculate monthly simple interest?

Divide the annual rate by 12 and the time by 12 months. For example, 6% annual rate becomes 0.5% monthly rate.

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