# Simple Interest Calculator

> Computes interest that accrues only on the original principal (no compounding) over a term in years, and the resulting total amount.

- Calculator id: `simple-interest` · Category: Finance (`finance`) · Tool name: `calculate_simple_interest`
- Canonical page: https://tttkmbb.com/finance/simple-interest · This document: https://tttkmbb.com/finance/simple-interest.md · JSON definition: https://tttkmbb.com/finance/simple-interest.json

## Purpose

Computes interest that accrues only on the original principal (no compounding) over a term in years, and the resulting total amount.

**Use when:** The agreement states simple, non-compounding interest, e.g. short-term personal loans, some bonds and statutory interest on late payments, or you want a quick estimate.

**Do not use when:** Interest is reinvested or charged on accrued interest (use compound-interest), or you need the level payment of an amortizing loan (use loan-payment).

## Input

| Parameter | Type | Unit | Required | Description |
| --- | --- | --- | --- | --- |
| `principal` | number |  | required | Amount lent, borrowed or deposited. (min 0, max 1000000000000) |
| `annual_rate_percent` | number | % | required | Simple annual rate in percent; 5 means 5 %. (min 0, max 1000) |
| `years` | number | years | required | Term in years; fractional values allowed (6 months = 0.5, 90 days = 90/365 ≈ 0.2466). (min 0, max 200) |

## Output

| Field | Type | Unit | Description |
| --- | --- | --- | --- |
| `interest` | number |  | Total simple interest over the term. |
| `total_amount` | number |  | Principal plus interest. |
| `interest_per_year` | number |  | principal × rate, the constant yearly interest. |
| `interest_per_month` | number |  | interest_per_year / 12. |

## Formula

`interest = principal × (annual_rate_percent / 100) × years; total_amount = principal + interest`

## Data Sources

- Investopedia – Simple Interest: Who Benefits, With Formula and Example — https://www.investopedia.com/terms/s/simple_interest.asp (reference, retrieved 2026-09-23)
- Wikipedia – Interest (simple interest) — https://en.wikipedia.org/wiki/Interest (reference, retrieved 2026-09-23)

Data freshness: `static`. Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output.

## API

- `GET https://tttkmbb.com/api/v1/calculate/simple-interest?principal=…&annual_rate_percent=…&years=…`
- `POST https://tttkmbb.com/api/v1/calculate/simple-interest` with JSON body `{"inputs": {…}}`
- Response: unified envelope (`success`, `request`, `result.values`, `result.units`, `sources`, `freshness`, `timestamp`, `next_actions`, `links`); see https://tttkmbb.com/docs/response-format.md
- Schema: https://tttkmbb.com/api/v1/calculators/simple-interest · OpenAPI operationId `calculate_simple_interest` in https://tttkmbb.com/openapi.json
- Authentication: none. Rate limit: fair use, see https://tttkmbb.com/docs/rate-limits.md.

## MCP

- Server: `https://tttkmbb.com/mcp` (Streamable HTTP, JSON-RPC 2.0, no auth)
- Tool:  `run_calculator` with `{"calculator_id": "simple-interest", "inputs": {…}}`

## Example

- 1,000 at 5 % for 3 years: inputs `{"principal":1000,"annual_rate_percent":5,"years":3}` → `{"interest":150,"total_amount":1150,"interest_per_year":50,"interest_per_month":4.17}`
- 25,000 at 4.5 % for 2.5 years: inputs `{"principal":25000,"annual_rate_percent":4.5,"years":2.5}` → `{"interest":2812.5,"total_amount":27812.5}`

```
GET https://tttkmbb.com/api/v1/calculate/simple-interest?principal=1000&annual_rate_percent=5&years=3
```

## Limitations

Interest is reinvested or charged on accrued interest (use compound-interest), or you need the level payment of an amortizing loan (use loan-payment). All values are computed from the formula above; no measurement or live data is involved.

## FAQ

**How do I enter a term in months or days?**

Convert to years: months / 12, days / 365 (or / 360 if the contract uses a 360-day banker's year). Example: 18 months = 1.5 years.

**How does simple interest compare with compound interest?**

Simple interest grows linearly; compound interest grows exponentially because earned interest also earns interest. Over one period at annual compounding they are equal; over longer terms compounding yields more.

## Related

- [Compound Interest Calculator](https://tttkmbb.com/finance/compound-interest.md) — Interest on interest at a chosen compounding frequency.
- [Loan Payment Calculator](https://tttkmbb.com/finance/loan-payment.md) — Level monthly payment on an amortizing loan.