Total Amount gained:
at 8% interest rate for 14 years
Simple interest meaning is the rate at which you borrow from or save or invest money with a financial institute. So, be it a loan, or a savings deposit or any other type of investment, you either pay the bank or receive from the bank a certain percentage of the principal amount. Simple interest is charged only on the principal amount.
A simple interest calculator is an easy online tool that helps you to calculate simple interest. It has an interface where you have to enter a few details to instantly find out simple interest on the principal amount on a daily, monthly, or yearly basis. These calculators help you efficiently compute the total amount of funds you can generate on maturity.
The simple interest formula calculator has a formula box where you have to provide three inputs:
● Principal Amount: the amount invested, borrowed, or saved on which the interest will be incurred
● Rate of Interest: the annual interest rate to be applied on the principal amount
● Period of Investment: the tenure in days, months, or years
Based on your inputs, the simple interest calculator online will use the simple interest formula to calculate the following:
● Total interest earned: total interest amount earned throughout the tenure
● Total amount: final value including the principal and interest amounts
With an easy formula you can calculate the simple interest:
SI = (P x R x T) / 100
In this formula:
SI is Simple Interest
P is Principal
R is Rate of Interest
T is Tenure
Once you have the simple interest amount, you can add principal and interest to get the total amount:
A = P + SI
A simple interest formula calculator can calculate simple interest using another simple interest formula:
A = P(1 + rt)
In this simple interest rate formula…
● A represents the total accumulated amount, that is, principal and interest
● P represents the principal amount
● r represents the rate of interest per year in decimal, that is, r = R/100
● t represents the period, that is, in months or years
Unlike the first method, this formula helps in directly calculating the final amount.
The workings of the simple interest calculator can be better understood with simple interest examples. Suppose, the principal amount is Rs 10,000, the rate of interest is 10%, and the number of years is 6.
A = 10,000 (1+0.1*6) = Rs 16,000.
Interest = A – P = 16000 – 10000 = Rs 6,000.
Calculate simple interest in these easy steps
with Kotak Mahindra Bank’s SI calculator.
● Choose the principal amount
● Select a desired interest rate
● Provide a tenure for which the interest needs to be calculated
Your simple interest and the total amount to be paid will be instantly calculated.
When you borrow a loan, you can use a simple interest calculator to understand the interest and the total amount you have to pay.
In case of savings and deposits, the financial institution pays you a certain interest. The SI calculator helps you in this situation as well.
A simple interest calculator can help you find out the returns that you will earn on your investments.
While there are other tools available, a simple interest calculator is a good place to start.