Simple Interest Calculator
Calculate simple interest, total amount, and interest earned using Principal × Rate × Time.
About this tool
Simple interest is a straightforward way to calculate earnings or costs on borrowed or invested money. Unlike compound interest, which reinvests gains to generate growth on growth, simple interest calculates only on the original amount you deposit or borrow. This makes it easier to predict and plan for, which is why it appears in many consumer financial products like savings bonds, car loans, and short-term bank certificates.
To calculate simple interest, you need three pieces of information: the principal (the starting amount), the annual interest rate, and the time period. The calculator automatically converts months and days into years so you can use whatever timeframe suits your situation. Just enter your values and it will show you both the interest earned (or charged) and the final total amount—a formula you'll often see in financial planning and loan comparison.
Frequently Asked Questions
Code Implementation
def simple_interest(principal: float, rate: float, time: float) -> dict:
"""
Calculate simple interest.
principal: initial amount
rate: annual interest rate as percentage (e.g. 5 for 5%)
time: time in years
"""
interest = principal * (rate / 100) * time
total = principal + interest
return {
"principal": principal,
"interest": interest,
"total": total,
"rate": rate,
"time": time,
}
# Example
result = simple_interest(principal=1000, rate=5, time=3)
print(f"Principal: ${result['principal']:,.2f}")
print(f"Interest: ${result['interest']:,.2f}")
print(f"Total: ${result['total']:,.2f}")
# Compare with compound interest
def compound_interest(principal: float, rate: float, time: float, n: int = 1) -> float:
"""n = compounding periods per year."""
return principal * (1 + rate / 100 / n) ** (n * time)
ci_total = compound_interest(1000, 5, 3)
print(f"\nCompound interest total: ${ci_total:,.2f}")
print(f"Difference (CI - SI): ${ci_total - result['total']:,.2f}")Comments & Feedback
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