Simple Interest Calculator
Simple Interest Calculator is a free online tool that helps to find simple interest for a given principal amount. There are three parameters required to calculate the simple interest namely, principal amount, rate of interest, and time period. This type of interest is calculated on the principal amount only.
What is a Simple Interest Calculator?
Simple interest calculator is a free online tool that helps you to find the simple interest for a principal amount. Usually, the simple interest that is paid over a certain time period is a fixed percentage of the principal amount. Simple interest is used to calculate short-term personal loans. To use the simple interest calculator enter the values in the input boxes.
Simple Interest Calculator
NOTE: Enter positive numbers only.
How to Use the Simple Interest Calculator?
Follow the steps given below to use the online simple interest calculator:
- Step 1: Go to online simple interest calculator.
- Step 2: Enter the values in the respective input boxes of the simple interest calculator.
- Step 3: Click on the "Calculate" button to find the simple interest.
- Step 4: Click on the "Reset" button to clear the fields and enter the new values.
How Does Simple Interest Calculator Work?
Compound interest is calculated on the principal amount as well as the amount of interest obtained over the given time period. However, simple interest is only calculated on the principal amount. In other words, as simple interest is not compounded hence, the borrower only pays interest on the principal amount. There are certain terminologies associated with simple interest that students have to be aware of before applying the formula. These are given below:
- Principal Amount: This is the amount of money that is originally deposited. The simple interest is calculated on this amount. It is represented by P.
- Rate of Interest: The rate at which the principal amount has been deposited for a given time period is known as the rate of interest. It is usually provided in the form of percentages. R is used to represent the rate of interest.
- Time period: The total duration for which the principal amount has been deposited is known as the time period. It is given by T.
Simple Interest can be calculated with the help of the formula given below:
S.I. = (P × R × T)/100
Solved Examples on Simple Interest Calculator
Example 1:
Find the simple interest on the principal amount of $500 if it is given for 2 years at 5% p.a and verify the answer using the online simple interest calculator.
Solution:
Here, the principal amount is $500, the time period is 2 years, and the rate of interest is 5%.
To find the simple interest, we will use the above formula.
S.I. = (P × R × T)/100
S.I. = (500 × 5 × 2)/100 = 5000/100
S.I. = $50
Thus, Simple interest is $50.
Example 2:
Find the simple interest on the principal amount of $1500 if it is given for 6 years at 8% p.a and verify the answer using the online simple interest calculator.
Solution:
Here, the principal amount is $500, the time period is 2 years, and the rate of interest is 5%.
To find the simple interest, we will use the above formula.
S.I. = (P × R × T)/100
S.I. = (1500 × 8 × 6)/100 = 72000/100
S.I. = $720
Now, use the above simple interest calculator to find the simple interest for the following problems:
- Rate= 10% p.a., Principal= $40000 and Time= 4 years
- Rate= 3.5% p.a., Principal= $4800 and Time= 3 years