One useful tool for calculating interest on loans or savings without compounding is a basic interest calculator. On a daily, monthly, or annual basis, you can compute the simple interest on the principal amount. You can enter the principle amount, yearly rate, and duration in days, months, or years in the formula box of the basic interest calculator. Interest on the loan or investment will be shown by the calculator.

The simple interest calculator will show the accrued amount that includes both principal and the interest. The simple interest calculator works on the mathematical formula:

A = P (1+rt)

• P = Principal Amount
• R = Rate of interest
• t = Number of years
• A = Total accrued amount (Both principal and the interest)

Interest = A – P.

Let’s understand the workings of the simple interest calculator with an example. The principal amount is Rs 10,000, the rate of interest is 10% and the number of years is six. You can calculate the simple interest as:

A = 10,000 (1+0.1*6) = Rs 16,000.

Interest = A – P = 16000 – 10000 = Rs 6,000.

What is Simple Interest, A = P (1+rt)

Simple interest is the rate at which you lend or borrow money. An additional sum of money is returned to the lender if a borrower takes out a loan from them. The principal is the amount borrowed that is granted for a predetermined amount of time. Interest is the additional sum that is reimbursed to the lender for the use of the funds.

Read Also: Loan Calculator

The principal amount is multiplied by the number of periods and the interest rate to determine the simple interest. You don’t have to pay interest on interest, and simple interest doesn’t compound. The principal amount will be lowered by the remaining portion of the payment in simple interest, which is applied to the interest for the month.

Simple Interest Formula

To calculate Total Maturity Amount Value:

The simple interest formula for the calculator which is utilized to compute the overall gains accumulated is represented as:

A = P(1 + rt)

here:

A represents the Total accumulated Amount (principal + interest)
P represents the Principal Amount
r represents the Rate of Interest per year in decimal; r = R/100
t represents the Time Period (months or years)

To calculate the Interest on the Investments and loans

SI= P X RX T/100

In it, the variables represent the following –

Groww SI calculator uses this formula to help easily determine interest rates and gauge the increase in the value of the initial investment. Let’s understand it with the help of an instance.

Mr. A has invested an amount of Rs. 15000 at an interest rate of 5% for almost 2 years. So his SI will be calculated as Rs. (15000 X 5 X 2/100) which is equal to Rs.16500.

How to Calculate Simple Interest Plus Principal

The formula for calculating simple interest plus principal is A = P(1 + rt). Here, A is the total accrued amount, which is principal plus interest or P + I, so interest is I = Prt.

In calculating simple interest P is the principal amount of money invested at an interest rate R% per period for t, the number of time periods.

For these calculations the interest rate r is in decimal form, so note that r is R% divided by 100. Just take your interest rate as a percentage and divide by 100. Also r and t are in the same units of time, typically years.

The most efficient way to calculate simple interest plus principal is to complete the calculation in one step with the simple interest equation A = P(1 + rt), where

• A = Total accrued amount (principal + interest)
• P = Principal amount
• R = Rate of interest per year as a percent
• r = Rate of interest per year as a decimal: r = R%/100
• t = Time period
• I = Simple interest

You could also calculate simple interest only with the formula I = Prt, where I is interest, P is principal, r is interest rate as a decimal, and t is time period. You then need to add the interest to the original principal amount to get the total interest plus principal. So doing it this way involves multiple steps.

Using the Simple Interest Calculator

The principal plus interest, principal only, and interest simply may all be found with this straightforward interest calculator. Along with time periods in days, weeks, months, quarters, and years, it can also compute the basic interest rate. The calculator can identify the missing variable if you enter any three of the following: total amount, principle, interest rate, or time period.

At some point you may need to calculate simple interest for a period of months rather than years. You would use the same simple interest formula A = P( + rt), but you first need to convert your number of months into an equivalent number of years. Just divide months by 12 because there are 12 months per year.

Let’s do an example of finding simple interest for a period of 9 months. Say you’re getting a short-term CD for $10,000, and the rate is 4% with no compounding. What is the amount of simple interest that you will earn?

Using the formula for simple interest plus principal A = P(1 + rt), plug the known variables into the equation.

A = P(1 + rt)
Convert months to its equivalent in years: 9 / 12 = 0.75
A = 10,000(1 + (0.04 * 0.75))
A = 10,000(1 + 0.03)
A = 10,000(1.03)
A = 10,300

Since your total principal plus interest is $10,300, subtract the original principal of $10,000 to get the amount of interest:

Simple Interest = 10,300 – 10,000 = $300

Just remember to divide your number of months by 12 to get the number of years if you’re doing this calculation by hand. The Simple Interest Calculator above lets you plug in months so we do the conversion for you.