Simple Interest Calculator
This calculator helps you determine the simple interest earned on an investment or the simple interest paid on a loan.
Results
Total Simple Interest: —
Total Amount: —
Understanding Simple Interest
Simple interest is a straightforward method of calculating the interest charge on a loan or the interest earned on an investment. It's calculated only on the original principal amount. This means that the interest earned or paid does not compound over time; it remains constant for each period.
How Simple Interest is Calculated
The formula for simple interest is:
Simple Interest (SI) = (P × R × T) / 100
- P represents the Principal amount (the initial amount of money borrowed or invested).
- R represents the Annual Interest Rate (expressed as a percentage).
- T represents the Time Period (in years) for which the money is borrowed or invested.
The total amount after the simple interest is applied is calculated as:
Total Amount (A) = Principal (P) + Simple Interest (SI)
Why Use a Simple Interest Calculator?
While the formula is simple, using a calculator can save time and reduce the chance of errors, especially when dealing with different principal amounts, rates, and time periods. It's useful for:
- Students: To understand and practice interest calculations for academic purposes.
- Borrowers: To estimate the interest cost of short-term loans.
- Investors: To project potential earnings from fixed-income investments over a specific period, assuming no compounding.
Example Calculation
Let's say you invest $1,000 at an annual interest rate of 5% for 2 years. Using our calculator:
- Principal (P) = $1,000
- Annual Interest Rate (R) = 5%
- Time Period (T) = 2 years
Using the formula: SI = (1000 × 5 × 2) / 100 = $100
The total amount you would have after 2 years is: Total Amount = $1,000 (Principal) + $100 (Simple Interest) = $1,100.
This calculator will quickly provide you with these figures.
function calculateSimpleInterest() {
var principalInput = document.getElementById("principal");
var rateInput = document.getElementById("rate");
var timeInput = document.getElementById("time");
var principal = parseFloat(principalInput.value);
var rate = parseFloat(rateInput.value);
var time = parseFloat(timeInput.value);
var simpleInterest = "–";
var totalAmount = "–";
var resultDiv = document.getElementById("result");
if (isNaN(principal) || principal <= 0 ||
isNaN(rate) || rate <= 0 ||
isNaN(time) || time <= 0) {
document.getElementById("simpleInterest").textContent = "Invalid input. Please enter positive numbers.";
document.getElementById("totalAmount").textContent = "";
return;
}
// Calculate Simple Interest: SI = (P * R * T) / 100
simpleInterest = (principal * rate * time) / 100;
// Calculate Total Amount: A = P + SI
totalAmount = principal + simpleInterest;
document.getElementById("simpleInterest").textContent = simpleInterest.toFixed(2);
document.getElementById("totalAmount").textContent = totalAmount.toFixed(2);
}
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