Simple interest calculator

What is a simple interest calculator and how to use it in 2025 in the Philippines

The best simple interest calculator
Principal amount
i

The amount you want to receive

PHP
PHP
5000 ₱
2000000 ₱
Loan term
i

Specify the desired length of the loan

months
days
1
48
Annual Percentage Rate (APR)
i

Choose the interest rate on the loan

1 %
50 %
Type of payments
i

Specify the type of payment for calculating

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A purchaser borrows money from a lender and pays a percentage back to them; this is known as the simple interest rate or interest payments. The initial principal is the borrowed amount, and the total interest is the extra money given back to the lender for utilizing the money over a specific time period. This could be paid back annually (annual interest rate), monthly, or daily.

A simple interest calculator is used to calculate simple interest. To do the task, users are required to use a complex formula that involves dividing the principal by the number of periods and then multiplying it with the annual interest rate. A unique trait of simple interest is that it does not compound, and interest is not paid on interest.

What is a simple interest calculator?

A simple interest calculator is one of the financial instruments and a computerized tool that allows you to calculate total interest earned without spending too much time or doing intricate calculations. It already has a simple interest rate formula box filled out in the online tool. Enter the initial principal, interest rate, and the time periods on the tool according to your needs.

It is a free tool that calculates the interest and the future value on loans or savings without compounding. You can calculate the simple interest on the principal on a daily, monthly, or yearly basis. 

It has a formula box in which you enter the principal, annual interest rate, and time in days, months, or years, and the calculator will show you interest on the loan or the investment and the future value.

How to use a simple interest calculator?

Basically, simple-interest online calculators are simple to use. To calculate simple interest, enter the following information:

After you enter this data and press the Calculate button, the simple interest calculator will utilize the simple interest formula to determine the accumulated interest and the future value in seconds. You will receive the exact interest you would receive/pay during the term.

When to use the simple interest calculator?

The online calculator instantly shows you the initial principal amount you will have to pay or receive after the maturity period, i.e., the future value of the loan. To get the estimated amount, you must first enter basic information like principal amount, time period, and annual interest rate in the tool. One can use the simple interest online calculators when:

How can a simple interest calculator be helpful to you?

A simple interest calculator is an online tool that makes a quick and easy simple interest calculation. Unlike other online calculators, this tool can display the results of complex numbers instantly.

The following points explain how the tool can help you:

Types of simple interest calculators

The online calculators are of two types: ordinary simple interest calculators and exact simple interest calculators. Some simple interest calculation are made specifically for either of these two, and some are made for both of them.

Ordinary simple interest calculator 

In an ordinary calculator, a year is considered to be 360 days while calculating the interest. The procedure to use the ordinary simple interest calculator is as follows:

Example: Let's say a businessman got a money loan of ₱1,500,000 from a bank to expand his business on May 30, 2012. The agreement is that he pays it back with a 6% interest rate on August 10, 2012(end date). Now, input these values on the ordinary simple interest calculator to calculate the simple interest:

To calculate the number of days,

Converting days to years:

Exact simple interest calculator 

In exact simple interest calculator, a year is considered to be 365 (or 366 days of a leap year) days in order to calculate interest. The procedure for using the exact simple interest calculator is the same as the ordinary. It is as follows:

  1. To calculate simple interest here, enter the principal amount, the interest rate, the time periods, and x for the unknown value in the respective input fields provided.

  2. Now click on the button Solve to get the simple interest.

  3. The simple interest for the given amount will be displayed in the output field immediately. 

Example: Someone borrowed money (₱18,000) from his friend on December 25, 2010. His promise is that he pays it back on 14 February 2011 at 8% interest. Now let's use the tool to determine how much is to be paid.

The principal amount is ₱18,000, and the interest rate is 8%

Counting the number of days from December 25 to February 14 (the start date is always the day after it was borrowed):

What are the benefits of using a simple interest calculator?

A simple interest calculator helps borrowers and lenders make good financial decisions because it provides a wide variety of features. Some of the benefits of using it are:

Offers error-free result

The tool helps calculate simple interest conveniently and without any errors (using the simple interest formula). Using the online calculator, you're sure that there are no possibilities of mathematical errors that are common when using manual methods.

Offers support for multiple currencies

The tool can be used to calculate interest regardless of the currency. It works well for any currency, such as the dollar, euro, pounds, peso, etc., and calculates values as per the different currencies.

Offers better speed

The online tool provides a very quick picture of the interest you will probably have while you borrow cash or while you lend cash (interest earned) or even deposit it.  The tool can be used to calculate the overall comparison between various borrowing options, hence aiding in decision making. It provides comprehensive details, including interest and principal amounts. You can also see the future value of your loan.

Functions of a simple interest calculator

There are no special features or functions; one just needs to input the values correctly and then they are sure of getting their problem solved in a split of seconds. 

Some of the functions one may likely see while using this tool are:

How to use a keyboard for online simple interest calculation?

Using the computer's keyboard to input data for this tool is very easy. This is because everything is basically digits, so there are really no special functions.

Examples of calculations using a simple interest calculator

Example 1

Someone purchased a car worth ₱480,000. He borrowed the money from the bank at 10% per annum for a period of 4 years. Using a simple interest calculator, how much amount does he have to pay after this time period?

So, his payment is ₱672,000 after 4 years.

Example 2

If someone borrows a sum of ₱460,500 for a term, 21 months at 20% per annum, how much simple interest will they remunerate, using the simple interest calculator?

Therefore, the person is going to remunerate ₱161,175

How to perform complex tasks using a simple interest calculator?

The tool is not just useful for borrowers and lenders; simple interest is a topic covered in school, so it might be utilized by both students and instructors.

Complex questions on the topic are sometimes asked in a classroom context, and the tool can also solve them, but how can we utilize the technology here? It is accomplished by understanding how to correctly enter your data. Some calculators provide step-by-step answers, while others will solve and show you how much you are paying back on your mortgage each year, month, and even daily.

Let's look at this example:

A man deposits ₱30,000 in the State Bank of the Philippines for 3 years, which earns him an interest of 8%. Calculate the amount he gets after one year, two years, and three years using the simple interest calculator.

You do not have to start working out the amount he gets for each year, the calculator does it and shows you each step it uses:

Firstly, input the data correctly in the calculator;

For every ₱100, he gets ₱8. (Since the rate is 8% → 8 for every 100)

Therefore, for ₱1 he gets = ₱8/100

And for ₱30,000 he gets = 30,000 x 8/100 = ₱2,400

Therefore, the amount he gets after 1 year = principal (P) + simple interest (S.I.)

= 30,000 + 2,400 = ₱32,400

The amount he gets after 2 years = principal (P) + simple interest (S.I.)

= 30,000 + 4,800 = ₱34,800

The amount he gets after 3 years = principal (P) + simple interest (S.I.)

= 30,000 + 7,200 = ₱37,200

So we can see from the above example that the calculator can solve complex problems too.