Simple Interest Calculator

Whats is Simple Interest ?

Simple interest is a type of interest calculation where the interest is calculated only on the principal amount of a loan or investment. It is a straightforward method of calculating interest and does not take into account any compounding, which is the process of adding interest to the principal amount and then calculating interest on both the principal and accumulated interest.

The formula for calculating simple interest is as follows:

Simple Interest = Principal x Rate x Time

Where:

• Principal: The original amount of money borrowed or invested.
• Rate: The interest rate expressed as a decimal.
• Time: The length of time the money is borrowed or invested, usually expressed in years.

For example, if you borrow $1,000 at a simple interest rate of 5% per year for 3 years, the total interest you would pay is:

Simple Interest = (1,000 x 5 x 3)/100
Simple Interest = $150

So, you would have to pay back a total of $1,150 at the end of the 3-year period.