Simple Interest
Calculate simple interest.
Formula
Simple Interest (SI) = (P × R × T) / 100
Total Amount (A) = P + SI
Where:
- P = Principal Amount
- R = Annual Interest Rate (%)
- T = Time (in years)
Simple interest is the most basic method of calculating the interest charge on a loan or the return on an investment. Unlike compound interest, it is calculated solely on the original principal amount. This means that the interest amount is the same for every period of the loan or investment. This calculator is a straightforward tool to compute this value, ideal for understanding basic loan agreements or simple investment scenarios. To use the calculator, you need to provide three key pieces of information. First, enter the 'Principal Amount', which is the initial amount of money that was borrowed or invested. Second, input the 'Annual Interest Rate' as a percentage. This is the rate at which the interest is calculated per year. Third, specify the 'Time' period for which the money is borrowed or invested, in years. Once you click 'Calculate', the tool will compute two important figures. It will show you the 'Simple Interest', which is the total amount of interest earned or paid over the specified period. It will also display the 'Total Amount', which is the sum of the original principal and the simple interest. This final figure represents the total amount that needs to be repaid or the total value of the investment at the end of the term.