Calculate simple interest

An excel formula to calculate simple interest

 Calculate simple interest

To calculate simple interest in Excel (i.e. interest that is not compounded), you can use a formula that multiples principal, rate, and term.

This example assumes that $2500 is invested for 11 years at an annual interest rate of 7%. Simple interest means that interest payments are not compounded – the interest is applied to the principal only.

In the example shown, the formula in C8 is:


How this formula works

The general formula for simple interest is:


So, using cell references, we have:

=C5*C7*C6 =2500*11*0.07 =1925

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