Simple Interest (I)
$0.00
Total Amount (A)
$0.00
How Simple Interest is Calculated
Simple Interest (I) is the easiest way to calculate interest on a principal amount. It is based on the original principal amount, annual rate, and the duration of the loan or investment.
Simple Interest Formula
$$I = P \times R \times T$$
Where:
- $\mathbf{I}$ is the **Simple Interest**
- $\mathbf{P}$ is the **Principal Amount**
- $\mathbf{R}$ is the **Annual Rate** (as a decimal, so 5% is 0.05)
- $\mathbf{T}$ is the **Time** in years
Total Amount Formula
$$A = P + I$$
The Total Amount (A) is the original Principal plus the calculated Simple Interest.