Simple Interest Calculator – Calculate Simple Interest Online
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.
Simple Interest Formula
To calculate Total Maturity Amount Value:
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)
To calculate the Interest on the Investments and loans
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.
What is the Simple Interest Formula and when is it Used?
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:
- When one has borrowed money: To repay extra payment of interest along with the borrowed amount. The formula for simple interest can help to calculate the borrowing cost as Interest.
- When someone lends money: If someone has given money to someone to earn Interest Income in exchange. By using the Simple Interest formula, one can easily get the extra income figure as the Interest.
- When someone has invested money: If someone has invested their surplus money in deposits such as FD, RD or savings schemes like SSY, PPF or others, can also calculate the Interest Income with a simple interest calculator.
How to Calculate Simple Interest using Calculator?
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.
How can Simple Interest Calculator help you?
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.
- This simple interest calculator offers you output by calculating both principals as well as interest.
- Although it is easy to calculate simple interest for shorter tenors but for long consecutive years, a manual mechanism increases the chances of mistakes. So, use an online simple interest calculator for accurate calculation.
- Quick and easy way to gain insight into interest as well as the increase in the invested capital.
Advantages of using Simple Interest Calculators
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.
- SI is computed irrespective of any unit. Be it dollar, euro or any other currency, it calculates effectively.
- Users who intend to save time on calculating interest rates with changing years can save their time with its judicious use.
- Numerous variables are available to help you gauge your total investment. So, knowing about the total return and maturity time helps you to take viable decisions.
- A simple interest loan calculator helps in determining the current value of money.
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Simple Interest Caculator – FAQs
Que. What can I determine with the help of SI calculators?
Ans. Users can determine the interest rate on the principal amount as well as total return incurred after completion of tenure.
Que. Can I change the unit of the amount to different currencies?
Ans. Yes, a unique feature of this computing tool is that one can compute values as per different currencies.
Que. Do interest rates on principal amount changes over time in SI?
Ans. No, unlike compound interest on principal amount stays stagnant.