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Simple Interest Principal Calculator

Work backward from a simple-interest total, annual rate, and term (years) to find the principal you need. Computed as principal = total / (1 + rate x years), with total interest shown alongside.

Input

$
%
yr

Result

Required principal (2% annual rate, 5 yr, simple interest)

$1,000,000.00

Total amount

$1,100,000.00

Total interest

$100,000.00

How it works

  • This tool assumes simple interest and works backward from the total amount (the full sum you receive or repay), the annual rate, and the term (years) to find the principal required.
  • For simple interest, total = principal x (1 + rate x years), so solving for the principal gives principal = total / (1 + rate x years), which is the formula used here.
  • The annual rate entered as a percent is divided by 100 to a decimal (for example, 2% becomes 0.02), then the total is divided by the factor 1 + rate x years to obtain the principal.
  • Total interest is calculated as total minus principal and shown on a stat card together with the total amount.
  • Simple interest does not add interest on top of interest, so results differ from compound interest, where interest is added to the principal. Under the same conditions, compound interest requires a smaller principal.
  • Displayed amounts are rounded approximations. Actual deposits and loans may differ due to interest calculation methods, rounding rules, and taxes.