Simple Interest Calculator
Calculate basic interest on loans or savings with ease. Understand how your money grows over time with linear interest.
Interest Earned
$750
Total Maturity Value
$5,750
How Simple Interest Works
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, simple interest is only calculated on the initial amount you borrow or deposit. This means the interest amount remains the same for every period.
The Formula
I = (P × R × T) / 100
- I = Interest
- P = Principal (Initial Amount)
- R = Annual Interest Rate (as a percentage)
- T = Time (in years)
Interest Growth Over Time
| Time Period | Principal | Rate | Total Interest |
|---|---|---|---|
| 1 Year | $1,000 | 5% | $50 |
| 5 Years | $1,000 | 5% | $250 |
| 10 Years | $1,000 | 5% | $500 |
| 20 Years | $1,000 | 5% | $1,000 |