Simple Interest Calculator

What is Simple Interest?

Simple interest is interest calculated only on the principal amount, not on any previously earned interest. It's a straightforward method of calculating interest that's commonly used for short-term loans and some savings accounts.

Unlike compound interest, simple interest grows linearly over time, making it easier to calculate and understand.

Simple Interest Formula

Simple vs Compound Interest

Simple interest is typically used for:

• Short-term loans (car loans, personal loans)
• Some savings accounts
• Bonds with fixed interest payments
• Situations where interest doesn't compound

For long-term investments and savings, compound interest usually provides better returns.

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