Simple Interest calculator

Simple interest calculator to calculate complex numbers and values , it can be used to calculate loans and mathematical interest.

Simple Interest Calculator
Enter Data (Principal,Time,Rate) below
Principal (P) $
Annual Rate (r) %
Time (t) yrs +
mo +
Days In The Years Select  
Calculated Results
Interest (I)
Simple interest formula= (principal*time*rate)/100

Simple interest explanation, it is helpful to first understand the concept of a unit period. For the purpose of this discussion, a period is a consistent unit of time. That is, a period may be a day, a week, a month a year, or any other unit of time that is consistent over the entire term for which money is borrowed or invested. The term, that is the time between the start date and end date is divided up into the selected unit periods.

Interest is normally calculated as of the end or each period.

Our simple interest calculator calculates for the exact number of days. Therefore, this calculator's unit period is one day.

SI Equation formula

Formula for simple interest calculations is given below:

SI = Amt * Rate * Periods

Amt is the principal amount as of the start date of investment. Amt is the same thing as the present value (or PV).

Rate is the periodic rate expressed as a decimal value. The periodic rate is calculated by the dividing the annual rate by the number of periods in a year.

This calculator uses the "day" as the unit period. This leads to an anomaly. Normally one would think that there are 365 days in a year except for leap years. However in banks, because debts are frequently paid monthly, the came up with another count for the days in the year, it was much easier to standardize on a 30 day month thus making interest for all months the same. This meant that a year was 360 days long (12 months * 30). So, the days in year is 360. In other words the rate in the above formula would be calculate by taking the annual interest rate divided by 360. This little twist also happens to increase the interest amount. Note that our calculator supports 360, 364 and 365 day years. (The 364 day year derives from 52, 7 day weeks in a year, or 364.)

Periods is the number of periods over the entire term. Term is the time from start date to end date inclusive.

Disclaimer: This is free tool provided for informational purposes only. Use of this tool is should be done at your own discretion and should not represent total fact on actual values. interest calculation using this tool is done at your own discretion

Home |maths