Simple Interest Calculator
Need to calculate interest on a short-term loan or a basic investment? Our simple interest calculator provides instant results with detailed breakdowns and growth charts.
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What is Simple Interest?
Simple interest is a quick and easy method of calculating the interest charge on a loan. It is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.
Unlike compound interest, which calculates interest on both the principal and the interest accumulated from previous periods, simple interest is only calculated on the original principal amount.
The Simple Interest Formula
The standard formula for calculating simple interest is:
I = P × r × tWhere:
- I = The total amount of interest.
- P = The principal amount (the initial amount of money).
- r = The annual interest rate (decimal).
- t = The time the money is invested or borrowed for (in years).