Simple Interest Calculator
Calculate simple interest on a principal amount.
About this Tool
The Simple Interest Calculator determines the interest earned or paid on a principal amount at a fixed rate over a specific period. Unlike compound interest, simple interest is calculated only on the original principal and does not include interest on accumulated interest.
Common Use Cases
Basic Loan Analysis
Understand the interest cost for simple, short-term loans where interest is not compounded.
Educational Tool
Learn the fundamental concept of interest calculation as a basis for more complex financial topics.
Comparing Investments
Quickly compare the returns of a simple interest investment against a compounding one to see the difference.
Pro Tips
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Time Period is Key
Ensure your interest rate and time period use the same time unit (e.g., an annual rate with a term in years).
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Less Common in Practice
Most modern financial products like savings accounts and loans use compound interest. Simple interest is more of a foundational concept.
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Linear Growth
Simple interest results in linear growth of your money, whereas compound interest leads to exponential growth.