Simple Interest Calculator
Calculate Simple Interest
Results
Simple Interest
$0.00
Total Amount
$0.00
Compound Amount
$0.00
Interest Difference
$0.00
Understanding Simple Interest
What is Simple Interest?
Simple interest is calculated only on the principal amount. Unlike compound interest, it doesn't include interest earned on previously accumulated interest. The formula is:
Simple Interest = (Principal × Rate × Time) / 100
Common Applications
- Short-term loans
- Car loans
- Consumer loans
- Some types of bonds
- Basic savings accounts
Simple vs Compound Interest
Simple Interest
- Interest calculated on principal only
- Linear growth over time
- Easier to calculate
- Lower total interest earned/paid
- Better for borrowers
Compound Interest
- Interest calculated on principal and accumulated interest
- Exponential growth over time
- More complex calculations
- Higher total interest earned/paid
- Better for investors
Tips for Using Simple Interest
- Compare with compound interest options
- Consider the time period carefully
- Check if interest is truly simple
- Look for prepayment options
- Calculate total cost upfront
- Understand payment schedules
- Consider inflation effects