What is simple interest?
Simple interest is interest calculated only on the original principal. Unlike compound interest, previously earned interest is not added to the principal for the next calculation period.
Simple interest formula
I = (P × R × T) ÷ 100
I is the interest, P is the principal, R is the annual interest rate expressed as a percentage, and T is the time in years.
Worked example
If the principal is ₦500,000, the annual rate is 8.5%, and the period is 3 years, the simple interest is ₦127,500. The total amount is therefore ₦627,500.
How to use this calculator
Enter the amount you want to calculate interest on, enter the annual simple-interest rate, and enter the period in years. Results update as you type. For months, divide the number of months by 12 before entering the time.
Important: This calculator provides estimates based on
the simple-interest formula. Actual financial products may use different
rates, fees, compounding periods, repayment schedules, taxes, or terms.
Check the terms of the relevant financial institution before making a
financial decision.