Investments earned on a scheme are calculated as gains accumulated against the interest accumulated. Such gains are compiled in either compound or simple interest. Interest is calculated on the principal amount.
Calculating the amount that you will gain after a certain period based on the interest is vital. If your investment accumulates funds based on the simple interest you can use a simple interest calculator. These calculators help you easily compute the total amount of funds you will be able to generate on maturity.
The simple interest formula for the calculator which is utilized to compute the overall gains accumulated is represented as:
A = P(1 + rt)
A represents the Total accumulated Amount (principal + interest)
P represents the Principal Amount
r represents the Rate of Interest per year in decimal; r = R/100
t represents the Time Period (months or years)
SI= P X RX T/100
In it, the variables represent the following –
|R||Rate of interest|
Groww SI calculator uses this formula to help easily determine interest rates and gauge the increase in the value of the initial investment. Let’s understand it with the help of an instance.
Mr. A has invested an amount of Rs. 15000 at an interest rate of 5% for almost 2 years. So his SI will be calculated as Rs. (15000 X 5 X 2/100) which is equal to Rs.16500.
The amount one needs to pay or receive after a certain tenure base based on the interest can be calculated using the Simple Interest Formula. It is the best and simple method of calculating interest on the principal amount and should be used:
For individuals who are confused regarding the gains that they will accumulate once the maturity period is over, a simple interest EMI calculator is the only option. Just enter the principal, rate and time value and the result will be calculated within seconds.
It is regarded as the best computing device to determine the value of money gain over the tenure of investment. Users will know how much interest they will earn. Its simplified nature and accuracy have increased the demand for a simple interest rate calculator recently. The principal amount is constant when calculating a simple interest rate. This indicates the fact that interest is levied on principal remains the same for the consecutive tenure.
There are times when borrowers, depending on the manual method, people pay unpaid interest before principal. This situation leads to issues during computing simple interest on an amount. Following are some of the advantages of switching to an online calculator from the manual method.