Simple Interest
Interest earned on principal only, with no compounding.
Enter values
$
% p.a.
years
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Step by step
The formula
I = P × r × t / 100
Simple interest pays a fixed percentage of the original principal every period — interest never earns interest. It is common for short-term loans, bonds, and quick estimates; over long horizons compound interest overtakes it substantially.
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Frequently asked questions
How is simple interest different from compound?+
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus accumulated interest.
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