Simple Interest Calculator - Calculate Interest Earned

Simple Interest Formula

Simple Interest = P × R × T ÷ 100

Where:
P = Principal amount
R = Annual interest rate (%)
T = Time period (years)

Example Calculation

Example: $10,000 invested at 5% for 3 years
Simple Interest = (10000 × 5 × 3) ÷ 100 = $1,500
Total Amount = $10,000 + $1,500 = $11,500

Simple vs Compound Interest

• Simple Interest: Interest calculated only on principal
• Compound Interest: Interest calculated on principal + accumulated interest
• Compound interest grows faster over time
• Simple interest is common for short-term loans

Practical Applications

• Savings account interest calculations
• Loan interest calculations
• Investment return calculations
• Credit card interest (usually compound)