Simple Interest Calculator
Calculate final amount and interest with monthly/annual rate and period in months/years.
Final amount
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Total interest
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Periods
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Growth (simple interest)
Month-by-month evolution
| Month | Interest of the month | Accumulated interest | Total amount |
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What is simple interest?
In simple interest, interest is always calculated on the initial capital. The formula is M = C · (1 + i · n), where C is the principal, i the rate per period, and n the number of periods.
Example: BRL 1,000 at 2% per month for 3 months ⇒ M = 1000 · (1 + 0.02 · 3) = BRL 1,060.00.
Simple vs. compound
- Simple: linear growth (same interest each period).
- Compound: interest on interest (accelerated growth).
When to use simple interest
- Short-term operations: agreements up to a few months, with predictable cost.
- Commercial contracts: advances and invoices with fixed rate per period.
- Quick cost comparison: estimate the impact of a rate without compounding.
For longer horizons, compound interest usually reflects market reality better.
Convert annual ↔ monthly rate (to calculate correctly)
Even with simple interest, the rate must use the same period as the term. If your term is in months, use a monthly rate.
Practical tip: for short-term estimates, you may divide the annual rate by 12 to get a monthly rate. For stricter accuracy, prefer the exact rate stated in the contract.
- Example: 24 months and rate “10% per year” → use ~0.83% per month to estimate.
- If the term is in years, keep the annual rate and enter years in the period field.