Simple Interest Calculation
Calculate the maturity amount with simple interest.
This calculation provides an estimate; current legislation and official calculation prevail. For binding transactions, consult your accountant or the relevant authority.
$
Result
$16.000
Maturity: $16,000 · Interest: $6,000
Result in all units
Step-by-step solution
Interest = Principal × rate × term ÷ 100
What Is Simple Interest?
Simple interest is a type of interest calculated only on the initial principal. The interest earned is not added to the principal; the same amount accrues interest each period. It is used in short-term deposits and some types of loans.
How is it calculated?
How Is Simple Interest Calculated?
Interest = principal × rate × term
- Enter the principal, periodic interest rate and term.
- Total amount = principal + interest.
For example, 10,000 $ at %30 per year for 2 years: 10,000 × 0.30 × 2 = 6,000 $ interest, total 16,000 $.
Frequently Asked Questions
What is the difference between simple interest and compound interest?
Simple interest accrues only on the principal; with compound interest the earned interest is added to the principal and yields a higher return over the long term.