INTEREST EARNED
$0
Principal$0
Total amount$0
How Simple Interest Works
Simple interest is calculated only on the original principal, unlike compound interest which also earns on accumulated interest.
The Formula
Simple Interest = P × R × T ÷ 100
Simple vs Compound Interest
With simple interest, earnings grow at a constant rate. With compound interest, earnings accelerate as interest earns interest. Compound interest produces higher returns over long periods.
Frequently Asked Questions
Which is better for borrowers?
Simple interest is generally better for borrowers since interest doesn't compound on itself.
Which is better for savers?
Compound interest is generally better for savers since money grows faster over time.
Can time be entered in months?
Yes, convert months to years by dividing by 12 before entering.