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Simple Interest Calculator

.calculator-container { font-family: sans-serif; max-width: 500px; margin: 20px auto; padding: 20px; border: 1px solid #ccc; border-radius: 8px; box-shadow: 0 2px 4px rgba(0, 0, 0, 0.1); } .calculator-form { display: grid; gap: 15px; } .form-group { display: flex; flex-direction: column; } label { margin-bottom: 5px; font-weight: bold; } input[type="number"] { padding: 8px; border: 1px solid #ccc; border-radius: 4px; font-size: 1em; } button { padding: 10px 15px; background-color: #007bff; color: white; border: none; border-radius: 4px; font-size: 1.1em; cursor: pointer; transition: background-color 0.3s ease; } button:hover { background-color: #0056b3; } .calculator-result { margin-top: 20px; padding: 15px; background-color: #e9ecef; border: 1px solid #ced4da; border-radius: 4px; font-size: 1.1em; text-align: center; } function calculateSimpleInterest() { var principalInput = document.getElementById("principal"); var rateInput = document.getElementById("rate"); var timeInput = document.getElementById("time"); var resultDiv = document.getElementById("result"); var principal = parseFloat(principalInput.value); var rate = parseFloat(rateInput.value); var time = parseFloat(timeInput.value); if (isNaN(principal) || isNaN(rate) || isNaN(time) || principal <= 0 || rate < 0 || time <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields."; return; } // Simple Interest = (Principal * Rate * Time) / 100 var simpleInterest = (principal * rate * time) / 100; var totalAmount = principal + simpleInterest; resultDiv.innerHTML = "Simple Interest Earned: $" + simpleInterest.toFixed(2) + "" + "Total Amount Payable: $" + totalAmount.toFixed(2) + ""; }

Understanding Simple Interest

Simple interest is a straightforward method of calculating the interest charge on a loan or investment. It is calculated on the initial principal amount only. Unlike compound interest, simple interest does not earn interest on previously earned interest. This makes it a simpler, though often less lucrative for investors, form of interest calculation.

The formula for calculating simple interest is:

Simple Interest (SI) = (P × R × T) / 100

Where:

  • P is the Principal amount (the initial sum of money borrowed or invested).
  • R is the Annual Interest Rate (expressed as a percentage).
  • T is the Time period (in years) for which the money is borrowed or invested.

The total amount that will be repaid or accumulated at the end of the term is the sum of the principal and the simple interest earned:

Total Amount = Principal + Simple Interest

When is Simple Interest Used?

Simple interest is commonly used for:

  • Short-term loans, such as personal loans or payday loans.
  • Calculating interest on savings accounts or certificates of deposit (CDs) with a fixed term, though many now offer compounding.
  • Calculating interest on bonds.
  • Estimating interest costs for car loans or mortgages over their lifetime for comparison purposes.

Example Calculation:

Let's say you deposit $5,000 into a savings account that offers a simple annual interest rate of 4% for 5 years.

  • Principal (P) = $5,000
  • Rate (R) = 4%
  • Time (T) = 5 years

Using the simple interest formula:

SI = (5000 × 4 × 5) / 100 = 200000 / 100 = $1,000

The total amount you would have after 5 years is:

Total Amount = $5,000 (Principal) + $1,000 (Simple Interest) = $6,000

This means you would earn $1,000 in interest over the 5-year period.

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