How to calculate Interest using Simple Interest Calculator?

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How to calculate Interest using Simple Interest Calculator?

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There is standard formula to calculate simple interest using online simple interest calculator online. S.I= (P*R*T) / 100. Where S.I = Simple Interest, P= Principal, R= Rate of Interest, and T= Time. You have to follow the simple steps mentioned below to calculate Simple Interest:-

Step 1First of all, you have to determine your principal amount. The principal amount is the money on which interest is calculated. It must be noted that the principal is the money which is borrowed by you at the beginning of the Interest period.

Step 2Write down the rate of interest. The rate of interest is the percentage of the principal amount that will be paid for every period the interest gets build up. To get a decimal value of the rate of interest, you have to written down it as percentages and then, divided it by 100.

Step 3You have to recognize that the interest gets build up frequently or constantly spaced time periods. While calculating simple interest, there are years which can be divided into days, weeks, or months. Write down decimal value of time as it will symbolize how many time periods pass before to the loan will be paid.

It must be noted that, if the agreed monthly interest is for the 10-year life of the loan, the time period will be as 10 years × 12 months = 120 months.

Step 4Now, you can put your values for Principal, Rate of Interest, and Time into the formula S.I = P×R×T. So, you will be able to get the amount of simple interest on the loan acquired. The value you will get is the amount of money that is required to be paid on the principal borrowed.

Step 5Finally, you have to add the rate of interest to the principal amount to get the amount of money you owed. After paying the loan, you will not require to pay the interest. However, you will be required to pay back the principal amount borrowed. To get the total amount you owed, add the value of interest to the principal amount.