Finance
Simple Interest Calculator – Tutorial
On this page, you can find the logic, usage, and important details of the Simple Interest Calculator calculator.
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What is Simple Interest?
Simple interest is calculated only on the principal. Interest is not added back to the principal each period.
Formula
- Interest (I) = P × r × t
- Total (A) = P + I
P = Principal, r = Interest rate (decimal), t = Time (years)
Example
$10,000 at 30% for 1 year → Interest = 10,000 × 0.30 × 1 = $3,000 → Total = $13,000
Simple vs Compound Interest
- Simple: interest only on principal
- Compound: interest is added to principal each period and earns further interest