Simple Interest Calculator
Calculate interest without compounding.
Simple vs. Compound Interest
Simple Interest is calculated only on the principal amount, making it linear over time. Compound Interest is calculated on the principal plus accumulated interest, causing money to grow exponentially.
Formula
I = (P × R × T) / 100
- P: Principal Amount
- R: Rate of Interest per year
- T: Time period in years
Real World Uses
Simple interest is rarely used for savings accounts but is common in short-term car loans, some mortgages (bi-weekly plans), and informal lending between friends.