luckpandaHow to use the simple interest calculator
- Pick the currency and enter the principal.
- Enter the yearly interest rate.
- Enter the time and choose years, months or days.
- Read the interest and the total amount.
Simple interest, worked through
Interest = principal × rate × time ÷ 100. Total amount = principal + interest. Time is in years, so divide months by 12 and days by 365 (some US lenders use a 360-day year).
Example: a supplier lends a customer ₹2,00,000 at 12% a year for 9 months. Time = 9 ÷ 12 = 0.75 years. Interest = 2,00,000 × 12 × 0.75 ÷ 100 = ₹18,000, and the customer repays ₹2,18,000.
| Principal | Rate | Time | Interest | Total |
|---|---|---|---|---|
| $10,000 | 8% | 3 years | $2,400.00 | $12,400.00 |
| ₹2,00,000 | 12% | 9 months | ₹18,000.00 | ₹2,18,000.00 |
| ₹1,00,000 | 7.3% | 90 days | ₹1,800.00 | ₹1,01,800.00 |
| €1.000 | 5,5% | 2 years | 110,00 € | 1.110,00 € |
Simple vs compound interest
For one year they are the same. After that compound interest pulls ahead, because each year’s interest earns interest too. $10,000 at 8%:
| Years | Simple interest | Compound interest (yearly) | Difference |
|---|---|---|---|
| 1 | $800.00 | $800.00 | $0.00 |
| 3 | $2,400.00 | $2,597.12 | $197.12 |
| 5 | $4,000.00 | $4,693.28 | $693.28 |
| 10 | $8,000.00 | $11,589.25 | $3,589.25 |
| 20 | $16,000.00 | $36,609.57 | $20,609.57 |