In this free online simple interest calculator tool, you can calculate the interest amount based on the entered principal amount and rate of interest
Uses of the simple interest calculator tool
This tool is used when ones want to calculate the simple interest on loans, investments and savings. Based on the principal amount applied for, the rate of interest as stated by the bank and the time period for which the interest rate is calculated, this tool can calculate the interest amount and display it within seconds. It can also be used by math students who are studying the topic of Interest, specifically Simple Interest.
How to use the calculator
Step 1 : Enter the principal amount
Step 2 : Enter the rate of interest
Step 3 : Enter the time period in Years and months
Step 4 : Select the Interval from the drop-down: Monthly / Quarterly / Half Yearly / Yearly
Step 5 : Click on the Calculate button
The Interest amount and the Total amount will be displayed. Total amount = Principal amount + Interest amount
Example to try
Q1.Solve the Question by Using the Given information Below.
- Principal amount ($) : 5000
- Rate of interest (%) : 7
- Time period : 1 Year 6 Months
- Interval : Half-yearly
Solution:
Interest amount ($) : 262.5
Total amount ($) : 5262.5
A simple interest calculator is a useful tool that helps you calculate the interest earned or paid on a principal amount for a specified period of time. The concept of simple interest is one of the most basic principles of finance and is used in many different applications, including loans, investments, and savings accounts. In this article, we will discuss what simple interest is, how it works, and how you can use a simple interest calculator to calculate the interest on your investments, loans, or savings accounts.
What is Simple Interest?
Simple interest is the amount of interest earned or paid on a principal amount over a specified period of time. Unlike compound interest, which is calculated on both the principal amount and the accumulated interest, simple interest is calculated only on the principal amount. The formula for calculating simple interest is as follows:
Simple Interest = \text{Principal} \times \text{Rate} \times \text{Time Where :}
Principal is the amount of money you have borrowed or invested.
Rate is the interest rate expressed as a percentage.
Time is the length of time the money has been borrowed or invested, expressed in years.
For example, if you borrow $1,000 at an annual interest rate of 5% for 2 years, the simple interest would be calculated as follows:
Simple Interest = \$1,000 \times 5\% \times 2 \text{ Years} \= $100
This means that you would have to pay $1,100 at the end of the 2-year period, consisting of the original principal amount of $1,000 plus the simple interest of $100.
How does Simple Interest Calculator work?
A simple interest calculator is a tool that helps you calculate the interest on a principal amount over a specified period of time. The calculator uses the formula for simple interest to determine the amount of interest earned or paid on a principal amount.
To use a simple interest calculator, you need to enter the following information:
Principal: This is the amount of money you have borrowed or invested.
Rate: This is the interest rate expressed as a percentage.
Time: This is the length of time the money has been borrowed or invested, expressed in years.
Once you enter this information, the calculator will automatically calculate the amount of interest earned or paid on the principal amount.
Uses of Simple Interest Calculator
A simple interest calculator is a useful tool in many different applications, including loans, investments, and savings accounts. Here are some examples of how it can be used:
1. Calculating the interest on a loan
A simple interest calculator can be used to calculate the interest on a loan. For example, if you borrow $10,000 at an annual interest rate of 5% for 5 years, you can use the calculator to determine the amount of interest you will pay over the 5-year period.
2. Calculating the interest on an investment
A simple interest calculator can be used to calculate the interest on an investment. For example, if you invest $5,000 in a savings account that pays an annual interest rate of 2% for 10 years, you can use the calculator to determine the amount of interest you will earn over the 10-year period.
3. Comparing different investment opions
A simple interest calculator can be used to compare different investment options. For example, if you are considering investing in two different savings accounts, one that pays 2% annual interest and another that pays 3% annual interest, you can use the calculator to determine the amount of interest you will earn from each account over a specified period of time.
4. Determining the payment schedule for a loan
A simple interest calculator can be used to determine the payment schedule for a loan. For example, if you borrow $10,000 at an annual interest rate of 5% for 5 years, you can use the calculator to determine
