Simple Interest Calculator

Calculate future value of investments using simple interest formula A = P(1 + it)

By Pawan

|M.Tech Data Science, BITS Pilani | Mathematics, Statistics, Linear Algebra & Discrete Mathematics |Published: 2025-11-01 |Updated: 2025-11-01

Formula

A = P(1 + it)

Enter Values

Principal Amount ($) *

The initial amount invested or borrowed. Must be a positive number. This is the base amount on which interest is calculated.

Annual Interest Rate (%) *

Enter as percentage (e.g., 5 for 5% per annum). This rate remains constant throughout the investment period and applies only to the principal.

Time Period (years) *

Enter in years. For months, divide by 12 (e.g., 6 months = 0.5 years). For days, use actual/365 or actual/360 depending on convention. Canadian T-Bills use actual/365.

How It Works

Simple interest is calculated only on the principal amount using A = P(1 + it). Used for Treasury bills, commercial paper, and short-term loans where compounding does not occur.

Key Points

Use for T-Bills and short-term financial instruments.
Interest is proportional to principal, rate, and time.
Does not reflect compounding - for long-term use compound interest.
Canadian T-Bills use actual/365 day count convention.

Continue in this Category

Compound Interest Present Value

References

Broverman, S.A. (2015). Mathematics of Investment and Credit (6th Edition). ACTEX Publications. Chapter 1, Section 1.1.3, pages 12-14, Equation 1.2. Example 1.4 (page 14).

About the Author

Pawan

M.Tech Data Science, BITS Pilani | Mathematics, Statistics, Linear Algebra & Discrete Mathematics

BITS Pilani

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