Finance
Simple Interest Calculator
Calculate simple interest, where interest is charged only on the original principal.
Result
Simple interest never compounds. Most consumer credit compounds, so use the compound interest calculator unless the agreement specifically says otherwise.
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About this calculator
What is the difference from compound interest?
Simple interest is charged only on the original principal. Compound interest is charged on principal plus accumulated interest, so it grows faster and the gap widens over time.
Where is simple interest actually used?
Short-term business loans, some vendor financing and many informal arrangements. It is also how late-payment interest on invoices is usually calculated.
The formula
I = P × r × t
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