Simple Interest Calculator with Amortization Schedule
Simple Interest Calculator
Enter Details
Projected Value
Principal Amount
Interest Earned
Percent Growth
Amortization Schedule
| Period | Principal | Interest | Total Payment | Balance |
|---|
Understanding the Results
Projected Value
Projected value in our calculator is your starting money + total interest earned. If you invest $5,000 at 4% interest for 2 years, you’ll see:
- Principal: $5,000
- Interest earned: $400
- Final amount: $5,400
Interest Earned
This shows just how much extra money you made (or owe if it’s a loan). Higher interest rates or longer time periods mean more interest.
Percent Growth
This tells you how much your money grew compared to what you started with.
If you earn $200 interest on $1,000, your growth is 20%.
Amortization Schedule
This is a year-by-year or month-by-month breakdown of:
- Starting balance (your money at the beginning of each period)
- Interest added (how much extra you earned that period)
- Total payment (if it’s a loan, how much you pay back)
- Ending balance (your total money after each period)
What is Simple Interest
Simple interest is an easy way to calculate how much money you earn or owe over time. It is called “simple” because the interest is always based on the original amount of money, and not on any interest that builds up over time. For example, if you put $1,000 in a savings account with a 5% yearly interest rate, you will earn $50 each year.
Even after a few years, the interest stays the same because it doesn’t change based on past interest. Simple interest is easy to figure out and is often used for short-term loans or savings. It helps you understand how much extra you will get or pay without making things too complicated.
Formula for Simple Interest Calculation
Simple Interest = Principal × Rate × Time
Or SI = P × R × T
Let’s break it down in a simple way:
- Principal (P) is the starting amount of money you invest or borrow.
- Rate (R) is the interest rate per year, usually written as a percentage.
- Time (T) is how long the money is kept or borrowed, in years.
Example:
If you put $1,000 in the bank at a 5% yearly interest rate for 2 years, the calculation would be:
SI = 1000 × 0.05 × 2 = $100
That means you’ll earn $100 in interest over 2 years. At the end, you’ll have $1,100 total.
Simple interest is easy to calculate and is commonly used for things like car loans, short-term savings, and school assignments. It’s a great way to understand how money grows without getting too complicated.
Where to Use Simple Interest Calculator
A Simple Interest Calculator is useful when you want to know how much interest you’ll earn or pay over time on a fixed amount of money, without the interest compounding. You can use it in many everyday situations:
- Short-term loans: Like borrowing money from a friend or payday loans, where interest is charged just once.
- Car loans: Some auto loans use simple interest to calculate monthly payments.
- Personal loans: Especially if the lender offers a flat interest rate for a short time.
- School projects or math practice: It’s a great way for students to understand basic finance.
- Quick savings estimates: For example, if you save money in an account that pays a flat interest rate without compounding.
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