Understanding Your Simple Interest Calculation
Simple interest is a straightforward method of calculating the interest charge on a loan or earned on an investment. Unlike compound interest, which calculates interest on the principal amount plus any accumulated interest, simple interest is always calculated on the original principal amount only.
The formula for calculating simple interest is:
Simple Interest (SI) = (Principal Amount × Rate of Interest × Time) / 100
Where:
- Principal Amount (P): This is the initial amount of money borrowed or invested.
- Rate of Interest (R): This is the annual interest rate, expressed as a percentage.
- Time (T): This is the duration for which the money is borrowed or invested, usually expressed in years.
The total amount to be repaid or received at the end of the period is the sum of the principal amount and the calculated simple interest:
Total Amount = Principal Amount + Simple Interest
Simple interest is commonly used for short-term loans or in specific investment scenarios where the interest earned is not reinvested.
function calculateSimpleInterest() {
var principal = parseFloat(document.getElementById("principal").value);
var rate = parseFloat(document.getElementById("rate").value);
var time = parseFloat(document.getElementById("time").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "; // Clear previous results
if (isNaN(principal) || isNaN(rate) || isNaN(time) || principal < 0 || rate < 0 || time < 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
var simpleInterest = (principal * rate * time) / 100;
var totalAmount = principal + simpleInterest;
resultDiv.innerHTML =
'
Calculation Results:
' +
'
Principal Amount: $' + principal.toFixed(2) + " +
'
Annual Interest Rate: ' + rate.toFixed(2) + '%' +
'
Time Period: ' + time.toFixed(2) + ' Years' +
'
Simple Interest Earned/Owed: $' + simpleInterest.toFixed(2) + " +
'
Total Amount (Principal + Interest): $' + totalAmount.toFixed(2) + ";
}
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margin-bottom: 15px;
}
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display: block;
margin-bottom: 5px;
font-weight: bold;
color: #444;
}
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width: calc(100% – 12px);
padding: 8px;
border: 1px solid #ccc;
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transition: background-color 0.3s ease;
}
.calculator-inputs button:hover {
background-color: #0056b3;
}
.calculator-result {
flex: 1;
min-width: 250px;
background-color: #e9ecef;
padding: 15px;
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}
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}
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