Simple Interest Calculator

Lets first understand, what is simple interest and how we can calculate simple interest?

In economics, the rate of interest is the price of credit, and it plays the role of the cost of capital.

Simple interest is calculated only on the principal amount, or on that portion of the principal amount that remains. It excludes the effect of compounding. Simple interest can be applied over a time period other than a year, for example, every month.

Calculation of Simple Interest

Simple interest is calculated according to the following formula:

$$Simple\hspace{0.1cm}Interest = \frac{P*R*T}{100}$$

where,

P is the principal sum.

T is the time in years and

R is the annual rate of interest.

Example : Calculate the simple interest for the sum $ 10000 with 5% rate of interest for 2 years.

Solution:Here, P = $ 10000, R = 5% and T = 2 years

$$Simple\hspace{0.1cm}Interest=\frac{$\hspace{0.1cm}10000*5*2}{100}$$ $$Simple\hspace{0.1cm}Interest=\frac{$\hspace{0.1cm}100000}{100}$$ $$Simple\hspace{0.1cm}Interest=$\hspace{0.1cm}1000$$ $$Amount=Sum+Simple\hspace{0.1cm}Interest$$ $$Amount=$\hspace{0.1cm}10000+$\hspace{0.1cm}1000$$ $$Amount=$\hspace{0.1cm}11000$$

For calculating simple interest using above simple interest calculator, you have to just fill the given input boxes and press the calculate button, you will get simple interest and amount based on your entries.