Borrowing or lending money is common these days. It eases the financial pressure to buy assets. But loaning money comes with a cost called simple interest. The amount that you borrow for some time is the principal and the cost at which you borrow this principal amount is the rate of interest. The total extra amount that you pay in addition to the principal amount is the interest. Simple interest does not take into consideration the power of compounding. Hence, the amount of interest you pay in each installment through the loan tenure stays constant as there is no interest charged on the interest.
You can calculate the simple interest that you earn or have to pay using the simple interest calculator. It is a web-based tool that calculates the simple interest that you pay on a daily or monthly or yearly basis when borrowing or lending a particular principal amount for a specific time. The simple interest rate calculator reflects the total amount that you have to pay or receive along with the interest bifurcation when you borrow or lend money.
logic for Simple Interest Calculator.
Simple Interest Formula
Simple interest is calculated with the following formula: S.I. = P × R × T, where P = Principal, R = Rate of Interest in % per annum, and T = Time, usually calculated as the number of years.
The rate of interest is in percentage r% and is to be written as r/100.
Amount = Principal + Simple Interest
The SIP calculator online gives you estimates using three different growth scenarios like above-average, average, and below-average returns. You can pick a strategy that best fits your needs and begin investing.
The systematic investment plan calculator facilitates obtaining a close estimate of the amount accumulated after completing periodic payments for the desired tenure.
Estimating future value or the maturity amount will let you choose the most suitable
The results of the Simple Interest calculation that you receive from this tool are instantaneous. It is only a matter of a couple of clicks within which you will get your complete information. This especially helps in saving a lot of time when you have to calculate and compare borrowers or investments based on interest that you have to pay or receive respectively. You can also make informed decisions about investments and borrowings after comparisons between the compound interest and the simple interest that you will tabulate through this calculator.
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The cost that you pay in addition to the principal amount for borrowing money after factoring in a certain rate of interest for a particular period is the simple interest. It does not take into consideration the power of compounding. Hence, the amount of interest you pay in each installment through the loan tenure stays constant as there is no interest charged on the interest.
Disclaimer
ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.
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