Simple Interest Calculator

By Alastair Hazell. Reviewed by Chris Hindle.

Currency:

$ € £ ₹ ¥

St art ing balance:

₹ 75000

Int erest rat e:

3 % monthly

St art dat e? (opt ional)

04/23/2014

T ime period or end dat e?

T ime period End date

End dat e?

06/20/2024

Regular cont ribut ions (opt ional)

None Additions Deductions

Calculat e

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Simple interest projection

Final balance Initial balance

₹349,500.00 ₹75,000.00
Interest accrued Monthly interest

₹274,500.00 ₹2,250.00
End date

Jun 2024

Projection breakdown

monthly yearly

Year Int erest To t al Int erest Balance

Apr 2014 -- -- ₹75,000.00

2014 ₹18,000.00 ₹18,000.00 ₹93,000.00

2015 ₹27,000.00 ₹45,000.00 ₹120,000.00

2016 ₹27,000.00 ₹72,000.00 ₹147,000.00

2017 ₹27,000.00 ₹99,000.00 ₹174,000.00

2018 ₹27,000.00 ₹126,000.00 ₹201,000.00

2019 ₹27,000.00 ₹153,000.00 ₹228,000.00

2020 ₹27,000.00 ₹180,000.00 ₹255,000.00

2021 ₹27,000.00 ₹207,000.00 ₹282,000.00

2022 ₹27,000.00 ₹234,000.00 ₹309,000.00

2023 ₹27,000.00 ₹261,000.00 ₹336,000.00

 2024 ₹13,500.00 ₹274,500.00 ₹349,500.00

Disc la imer: Whilst eve ry e ffort has be e n m ade in building our c alc ulator tools, we are not to be he ld liable for any dam age s or
m one tary losse s arising out of or in c onne c tion with the ir use . Full disc laim e r.

You can use our simple int erest calculat or t o calculat e t he simple int erest on your savings or loan
wit hout compounding. That is t o say t hat int erest is only calculat ed on t he principal, not on
previously accumulat ed int erest .

Cont inue reading t o learn how t o calculat e simple int erest , discover what t he formula looks like and
get t ips on how t o use our calculat or.

Table of contents:

• How to calculate interest

• Simple interest f ormula (principal + interest)

• Variations of the simple interest f ormula

• What is simple interest?

• How to use our simple interest calculator

How to calculate interest

To calculate simple interest on a lump sum, multiply your lump sum figure by the
interest rate per period (as a decimal) and then again by the number of periods
you wish to calculate for. The formula for this is P × r × t .
To give an example, if you wish t o calculat e simple int erest on a $5,000 loan at a 3% annual int erest
rat e for 2 years, your calculat ion would be:

5000 × 0.03 × 2 = $300

Likewise, if you borrow $500 from a friend at 3% per mont h for 6 mont hs, your simple int erest
calculat ion would be:

500 × 0.03 × 6 = $90

Not e t hat t he int erest rat e (r) and t ime period (t ) are in t he same t ime unit s (years for t he first
calculat ion and mont hs for t he second). This is import ant for t hese int erest calculat ions t o work.

These simple int erest calculat ions assume t hat int erest is not compounded. Savings account s
earn compound int erest , meaning t hat int erest is calculat ed on t he already accumulat ed int erest
over t ime. So, if you're looking t o work out compound int erest , you should use our compound
int erest calculat or inst ead.

Simple interest formula (principal + interest)

If you wish t o calculat e a figure for int erest AND principal, t he formula for t his is A = P(1 + rt ),
where P is t he init ial principal, r is t he int erest rat e and t is t he t ime period.

A = P(1 + rt)
Where:
A = the future value
P = the initial principal
r = annual interest rate (decimal)
t = the time in years
Example calculation
Let 's say t hat we want t o lend a friend $5,000 at a yearly int erest rat e of 5% over 4 years. Your
calculat ion might look like t his:

Our formula: A = P(1 + rt)

P = 5000.

r = 5/100 = 0.05 (decimal).

t = 4.

Plugging t hose figures int o our simple interest formula, we get :

A = 5000 × (1 + (0.05 × 4)) = 6000

Your friend will owe you back $6,000 in 4 years t ime. Of t hat , t he int erest will be $1,000, which
works out at $250 per year. The t able below shows how t he int erest would accrue over each of t he
four years.

Year Principal Tot al Int erest Tot al

1 $5,000 $250 $5,250

2 $5,000 $500 $5,500

3 $5,000 $750 $5,750

4 $5,000 $1,000 $6,000

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Variations of the simple interest formula

Here are some ot her useful variat ions of t he simple int erest formula, which allows you t o calculat e
principal, rat e of int erest and t imeframe.

Calculat ion Formula

Calculate principal+interest (A) A = P( 1 + r t )

Calculate interest only (I) I=P×r×t

 Calculate principal (P) based upon f uture
value
P = A / (1 + rt )

Calculate interest rate as a percentage

(R)
R = ( 1/t ) ( A/P - 1) × 100

Calculate time f actor (how long it takes

to reach a target figure) (t )
t = ( 1/r) ( A/P - 1)

Where:

A = fut ure value of t he invest ment /loan

I = t ot al int erest

P = principal amount

r = int erest rat e (decimal)

R = int erest rat e (percent age)

t = t ime periods

What is simple interest?

Simple int erest is a form of int erest commonly used for t ransact ions such as aut o loans, st udent
loans or personal loans.

A simple int erest calculat ion t akes a sum of money (principal) and calculat es regular int erest only
on t hat original amount , wit hout t he effect of compounding. This is in direct cont rast t o compound
int erest , where accumulat ed int erest is added back t o t he principal for each calculat ion, so t hat
you effect ively earn int erest on already accumulat ed int erest .

It is t his difference t hat makes t he simple int erest calculat ion widely regarded as least
1
advant ageous t o savers and most advant ageous t o borrowers.

See also: Daily Compounding | SIP Calculat or | APY Calculat or

How to use our simple interest calculator
To use our simple int erest calculat or, ent er your st art ing balance, along wit h t he annual int erest
rat e and t he st art dat e (assuming it isn't t oday). Then, ent er eit her a number of years, mont hs or
days t hat you wish t o calculat e for or an end dat e. You can also include any regular addit ional
deposit s and wit hdrawals (addit ions and deduct ions). Once you click t he 'calculat e' but t on, t he
simple int erest calculat or will show you:

The t ot al int erest earned

The final value (principal plus accrued int erest )

A mont hly breakdown of int erest earned

To conclude
I hope t his calculat or and art icle has helped you wit h calculat ing t he int erest on your savings or
loan. If you have any quest ions or suggest ions for improvement s, please do drop me a line.

By Alast air Hazell

Updat ed: July 26, 2023

References

1 What is the Difference Between Simple & Compound Interest?, T he Motley Fool.