Interest, principal, rate or time from I = P × r × t, to the penny.
Interest
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Simple interest is worked out on the original sum only: the interest does not earn interest itself. Enter the principal, the yearly rate and the time, in years, months, days or between two dates, to get the interest and the final amount. You can also work back to the principal, the rate or the time from the interest or the final amount.
The calculator gives the interest by default. Choose Principal, Rate or Time to find that figure instead, then say whether you know the interest or the final amount, which is the principal plus the interest.
Years and months become a fraction of a year: 18 months is 1.5 years. Days, or the days between two dates, are divided by the day count you choose: 365 by default, as in GOV.UK’s example for court claims, or 360 if your agreement says so. Between two dates the calculator counts the difference: 1 to 30 September is 29 days.
Interest and principal are rounded once, to the nearest penny, with a half penny rounded up, and the final amount is the sum of the rounded figures. A rate found is shown to four decimal places, and so is a time in years. Copy the result, export it as a CSV file or save it to Priostack.
Interest = principal × yearly rate × time in years (I = P × r × t).
Time in years = months ÷ 12, or days ÷ 365 (or ÷ 360).
Final amount = principal + interest.
Principal = interest ÷ (rate × time), or final amount ÷ (1 + rate × time).
Rate = interest ÷ (principal × time); time = interest ÷ (principal × rate).
This is GOV.UK’s example for interest on a court claim. The yearly interest is £1,000 × 8% = £80, about 22p a day (£80 ÷ 365). Over 50 days the exact interest is £1,000 × 8% × 50 ÷ 365 = £10.96. GOV.UK multiplies the rounded 22p by 50 and gets £11, which is why its figure is 4p higher.
Simple interest pays the same amount each year, worked out on the original sum: £10,000 at 3% earns £300 a year, or £1,500 over five years. With compound interest, the interest is added to the balance and earns interest in turn: the same £10,000 at 3%, compounded yearly, earns £1,592.74 over five years.
Multiply the principal by the yearly rate and the number of days, then divide by 365. For £1,000 at 8% over 50 days: £1,000 × 8% × 50 ÷ 365 = £10.96. Choose Dates to have the days between two dates counted for you.
For a money claim in the county court in England and Wales, GOV.UK says the rate is usually 8% a year, worked out per day as simple interest. Once judgment is given, a High Court judgment debt carries 8% a year under the Judgment Debts (Rate of Interest) Order 1993, but a county court judgment carries interest only if it is for £5,000 or more or for a late commercial payment (County Courts (Interest on Judgment Debts) Order 1991, as amended in 1998). A business claiming from another business can charge interest on a late commercial payment under different rules, and Scotland and Northern Ireland have their own court processes.
Only if your agreement says so. The actual number of days is then divided by 360, so a full calendar year of 365 days earns 365/360 of the yearly rate: about 1.4% more interest than on a 365-day basis.
Choose Rate: £10,000 that grew to £10,450 in 18 months earned £450 of interest, which is £450 ÷ (£10,000 × 1.5) = 3% a year in simple interest.
In simple interest, yes: interest is never added to the balance, so 1% a month is 12% a year. Enter the yearly rate in the calculator.
This calculator gives general information, not legal, tax, financial or accounting advice. The rate, day count and period that apply depend on your agreement or on the court’s decision: check them before you rely on the result.
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