Simple Interest Calculator

What are Simple Interest?

Under the regime ofsimple interest, the rate of return (or charge) applies only to the Initial Capital (the original amount) throughout the entire period. Unlike compound interest ('interest on interest'), here the growth of your money forms a perfectly straight line on the graph.

The Formula: J = C × i × t

• J (Interest):The profit generated or the value of the fee charged at the end.
• C (Capital):The initial amount of money invested or borrowed.
• in (Taxi):The percentage charged per period.
• t (Time):The number of months or years that the operation will last.

When is it used in real life?

Although the financial market (such as banks and investments) prefers Compound Interest to maximize profits, the Simple Interest model is still used in late fees for electricity/water bills, overdue tax charges (such as the Selic rate on Income Tax), and informal agreements between friends.