Simple Interest
With simple interest only the principal earns, so the same amount accrues every year and you just multiply by the term.
Your numbers
Final amount
11,050,000
Interest
1,050,000
Formula
Interest = Principal × Annual rate ÷ 100 × Years
Most term deposits are simple; instalment products and loans behave closer to compound. Check the product terms.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| PrincipalThe money you put in — the base that earns interest. | 10,000,000 | 0 and up |
| Annual rate (%)Interest quoted per year; the monthly rate is this over 12. | 3.5 | 0 and up |
| Years (yr)How many years the money stays put; compounding bites harder as this grows. | 3 | 0 and up |
Step by step
Quick reference table
Results when only Principal changes and everything else stays put.
| Principal | Final amount | Interest |
|---|---|---|
| 5,000,000 | 5,525,000 | 525,000 |
| 7,500,000 | 8,287,500 | 787,500 |
| 10,000,000 | 11,050,000 | 1,050,000 |
| 15,000,000 | 16,575,000 | 1,575,000 |
| 20,000,000 | 22,100,000 | 2,100,000 |
What each result means
| Result | At default values |
|---|---|
| Final amountPrincipal plus interest — what you get at the end. | 11,050,000 |
| InterestThe interest earned or owed over the period. | 1,050,000 |
Common mistakes
Most term deposits are simple; instalment products and loans behave closer to compound. Check the product terms.
Glossary
- Principal
- The money you put in — the base that earns interest.
- Annual rate
- Interest quoted per year; the monthly rate is this over 12.
- Years
- How many years the money stays put; compounding bites harder as this grows.
- Final amount
- Principal plus interest — what you get at the end.
- Interest
- The interest earned or owed over the period.
Frequently asked questions
Q. How is Simple Interest calculated?
Interest = Principal × Annual rate ÷ 100 × Years — With simple interest only the principal earns, so the same amount accrues every year and you just multiply by the term.
Q. Can you walk through an example?
With Principal 10,000,000, Annual rate 3.5%, Years 3yr, the answer is Final amount 11,050,000.
Q. What do I need to enter?
Enter Principal, Annual rate, Years. The result recalculates as you type, and an empty box counts as zero.
Q. How much does the answer move if I change a number?
Changing only Principal moves the answer to Principal 5,000,000 → Final amount 5,525,000 and Principal 20,000,000 → Final amount 22,100,000. The table below lays out five steps.
Q. How are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
Q. Anything to watch out for?
Most term deposits are simple; instalment products and loans behave closer to compound. Check the product terms.
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