Simple Interest Calculator

Be it car loans, home loans, Certificates of Deposit (CDs), retailer instalments or mathematical calculations, SI or Simple Interest calculation is a process needed in everyday life. The accurate and fast results for simple interest calculation can save time and effort. And this is where a Simple Interest Calculator comes into play! 

A simple interest calculator is an essential tool for anyone looking to determine the interest on loans or investments based on the simple interest formula. By using a simple interest calculator, you can easily figure out how much interest is payable each month on a certain amount. A simple interest calculator calculates both the interest and principal. 

A simple interest calculator can also be used as a simple interest EMI calculator or simple interest loan calculator. It can be used by borrowers who are looking for a loan calculator simple interest process that helps them easily understand the total amount to be repaid over the loan period. An EMI calculator simple interest process provides easy calculation and understanding of loan repayment schedule.

One can calculate simple interest online easily with the help of the simple interest calculator available here at the JAIN (Deemed-to-be University) website. It ensures quick and accurate results. One needs to fill in the correct figure in the appropriate fields, such as: 

• Principal Amount (P)

• Rate of Interest (R) %:

• Time Period (T) in years

Once you have filled the above fields in the calculator, just click on the “Calculate” button to find immediate and precise results. 

What is Simple Interest?

Simple interest is calculated only on the original principal amount. It is commonly used for short-term loans and investments. The simple interest formula is:

SI = (P × R × T) / 100, where P is principal, R is rate, and T is time.

Simple Interest Examples with Simple Interest Formula

Principal (P) = ₹10,000

Rate of Interest (R) = 5% per annum

Time (T) = 2 years

Using the simple interest formula:

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

SI = (10,000 × 5 × 2) / 100 = ₹1,000

Total Amount (A) = ₹10,000 + ₹1,000 = ₹11,000

Simple Interest vs Compound Interest

Simple interest is calculated only on the initial principal, while compound interest is calculated on both the principal and accumulated interest. Compound interest grows faster over time due to this compounding effect.

Compound vs Simple Interest

Compound interest results in exponential growth as it accumulates on both the principal and interest. Simple interest grows linearly. It is calculated only on the principal amount. Compound interest is more beneficial for long-term investments.

Difference Between Simple Interest and Compound Interest

The main difference is that simple interest is calculated only on the principal, while compound interest includes both principal and accumulated interest. Compound interest grows faster and is more suitable for long-term investments.

Simple Interest Calculation Steps

Anyone who wants to know how to calculate simple interest must follow the given steps:

• Identify the Principal Amount (P): This is the initial amount of money that is either borrowed or invested.

• Determine the Interest Rate (R): The percentage at which the interest will be charged or earned, typically annually.

• Establish the Time Period (T): This is the duration for which the money is borrowed or invested, usually expressed in years.

• Apply the Simple Interest Formula: The formula of simple interest is:
  SI = (P × R × T) / 100
  This will give you the total interest earned or paid over the given time period.

• Calculate the Total Amount (A): If needed, add the interest to the principal to find the total amount after interest:
  A = P + SI

FAQs

What is a Simple Interest Calculator?

A Simple Interest Calculator is a tool used to quickly calculate the interest earned or paid on a principal amount over a period of time at a given interest rate.

How do you calculate simple interest?

Simple interest is calculated by multiplying the principal amount, the interest rate, and the period, then dividing by 100.

What is the formula for calculating simple interest?

The formula for simple interest is: SI = (P × R × T) / 100, where P is the principal, R is the rate, and T is the time.

How do I calculate simple interest monthly?

To calculate simple interest monthly, divide the annual interest rate by 12 and use the formula SI = (P × (R/12) × T) / 100, where T is the time in months.