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Simple Interest Calculator
$
%
Simple Interest
$0
Total Amount
$0
Formula Used
I = P × R × T
I = $0 × 0% × 0 years
Simple vs Compound Interest
Simple Interest Total: $0
Compound Interest Total: $0
Compound earns more: $0
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How to Use the Simple Interest Calculator
- Enter the principal (initial) amount
- Enter the annual interest rate
- Enter the time period and select units
- View the calculated interest and total
Simple Interest Examples
- Car loan - $20,000 at 6% for 5 years = $6,000 interest
- Personal loan - $5,000 at 10% for 2 years = $1,000 interest
- Short-term investment - $10,000 at 4% for 6 months = $200 interest
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Frequently Asked Questions
What is simple interest?
Simple interest is calculated only on the original principal amount. It doesn't compound, meaning you don't earn interest on previously earned interest.
How is simple interest calculated?
Simple Interest = Principal × Rate × Time. For example, $1000 at 5% for 2 years = $1000 × 0.05 × 2 = $100 interest.
Where is simple interest used?
Simple interest is commonly used for car loans, short-term personal loans, and some bonds. It's less common than compound interest for savings.
Is simple or compound interest better?
For savings, compound interest is better as you earn more. For loans, simple interest is better as you pay less. The difference grows significantly over time.