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Simple Interest Calculator
Investment Details
How to Use
Simple Interest Calculation
Simple Interest is calculated using the formula: SI = (P × R × T) / 100
Required Information
- Principal Amount: The initial amount of money invested or borrowed
- Interest Rate: Annual percentage rate of interest
- Time Period: Duration of the investment in years, months, or days
Understanding Results
- Simple Interest: Total interest earned over the time period
- Maturity Amount: Principal + Simple Interest
- Yearly Breakdown: Interest accumulation year by year
Common Interest Rates
- Savings Account: 0.5% per annum
- Fixed Deposits: 4.5% per annum
- Government Bonds: 4% per annum
- Personal Loans: 10% per annum
Use Cases
Short-term Investments
Short-term investments and temporary cash parking
- Money market accounts
- Short-term CDs
- Treasury bills
- Commercial paper
Fixed Deposits
Traditional savings and certificate products
- Bank CDs
- Credit union certificates
- Savings bonds
- Time deposits
Government Bonds
Government and corporate bond investments
- US Treasury bonds
- Municipal bonds
- Corporate bonds
- Savings bonds
Loans & Borrowing
Simple interest loan calculations
- Auto loans
- Personal loans
- Some student loans
- Equipment financing
Advantages
- Easy to calculate and understand
- Predictable returns
- No compounding complexity
- Good for budgeting and planning
- Transparent interest calculations
Disadvantages
- Lower returns compared to compound interest
- No benefit from reinvestment
- Interest doesn't earn additional interest
- Less suitable for long-term investments
- Inflation may erode real returns
Region-Specific Tips
- Simple interest is best for short-term investments
- Compare with compound interest options for longer terms
- Government bonds often use simple interest calculations
- Useful for calculating loan interest costs
- Consider treasury bills for safe simple interest returns
- Fixed deposits may offer simple or compound interest
Try Sample Calculation
Click "Load Sample" to see simple interest calculation for $50,000at 4.5% for 3 years.
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