Simple Interest Calculator

How to calculate Simple interest calculator?

Simple interest is calculated on the original principal for the entire time period using the annual interest rate.

Key formula: SI = P × r × t where P is principal, r is annual rate in decimal, and t is time in years.

Using the Simple interest calculator calculator: an example

Example values: Principal = $10,000, Annual rate = 5%, Time = 3 years.

Step-by-step calculation:

• Convert the rate to decimal: 5% → 0.05.
• Apply the formula: SI = 10,000 × 0.05 × 3 = 1,500.
• Calculate total amount: Total = Principal + SI = 10,000 + 1,500 = 11,500.
• Interpretation: You earn $1,500 in interest over 3 years; final amount is $11,500.

Frequently Asked Questions

How do I convert a percentage rate to decimal?

Divide the percentage by 100. For example, 4.5% becomes 0.045.

Must time be in years?

Yes, use years when the rate is annual. For months divide months by 12 (for example, 18 months = 1.5 years).

Is simple interest compounded?

No. Simple interest is not compounded; interest is calculated only on the original principal for the full term.