A simple interest calculator is a utility tool which helps you calculate the interest amount on loans and savings without compounding. Using this tool, you can easily calculate the principal amount on either a daily, monthly, or yearly basis. The simple interest calculator has this formula box where you are supposed to enter the principal amount along with the annual rate, and tenure in either days, months or years. As you enter these details, the calculator will display the interest on the loan or the investment amount.
Where
P is Principal Loan Amount
A is Total accrued amount (Both principal and the interest)
R/r is Rate of interest
T/t is Number of years
Interest = A – P.
For example : Here’s a simple example to help you understand this. Let’s say the principal amount is INR 5,000, the rate of interest is 10% and the number of years is 6. You can calculate this simple interest as:
A = 5,000 (1+0.1*6)
A = Rs 8,000.Interest = A – P
=> 8000 – 5000 => Rs 3,000.