Simple interest is the type of interest which is charged on the principal amount at a defined rate. e.g if you have taken a loan of 15000 for three months at an Interest rate of 5% then this 5% will be charged only on the principal amount of 15000 rather than compounded with the interest of each month.
This calculator calculates the amount of simple interest on a given principal amount. All you need is to select a currency, and put in the principal amount, annual interest rate & the time period in years, months or days and press calculate button.
The simple interest amount is equal to the principal amount times the annual interest rate divided by the number of periods per year m, times the number of periods n:
simple interest amount = principal amount × (rate / m) × n
Calculate the simple interest amount of principal amount of $5,000, annual interest rate of 6% and time of 18 months.
Solution:
principal amount = $5,000
rate = 6%
m = 12 months/year
n = 18 months
simple interest amount = $5,000 × (6% / 12months/year) × 18months
= $5,000 × (0.06 / 12months/year) × 18months
= $450
Utilize this basic premium mini-computer to find A, the Final Investment Value, utilizing the straightforward premium recipe: A = P(1 + rt) where P is the Principal measure of cash to be contributed at an Interest Rate R% per period for t Number of Time Periods. Where r is in decimal structure; r=R/100; r and t are in similar units of time.