What is the simple interest formula?

The simple interest formula is I = P × r × t, where I is interest, P is principal, r is the annual interest rate (as a decimal), and t is time in years. For example, $1,000 at 5% for 3 years = $1,000 × 0.05 × 3 = $150.

What's the difference between simple and compound interest?

Simple interest is calculated only on the original principal, while compound interest is calculated on principal plus accumulated interest. Compound interest grows faster because you earn interest on interest.

When is simple interest used?

Simple interest is commonly used for short-term loans, auto loans, consumer loans, and some bonds. Most savings accounts and mortgages use compound interest instead.

Simple Interest Calculator - Basic Interest Calculations

How to Use the Simple Interest Calculator

This free simple interest calculator helps you quickly calculate total interest. Simply enter your values in the fields above and click "Calculate" to see your results instantly.

Understanding Your Results

After entering your information, the calculator will display your results including total interest, total amount, average per month, average per year. Each result is calculated using standard formulas used by financial professionals and experts in the field.

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