Exceljet

Quick, clean, and to the point

Calculate simple interest

Excel formula: Calculate simple interest
Generic formula 
interest=principal*rate*term
Explanation 

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 $1000 is invested for 10 years at an annual interest rate of 5%. 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:

=C5*C7*C6

How this formula works

The general formula for simple interest is:

interest=principal*rate*term

So, using cell references, we have:

=C5*C7*C6
=1000*10*0.05
=500
Author 
Dave Bruns

Excel Formula Training

Formulas are the key to getting things done in Excel. In this accelerated training, you'll learn how to use formulas to manipulate text, work with dates and times, lookup values with VLOOKUP and INDEX & MATCH, count and sum with criteria, dynamically rank values, and create dynamic ranges. You'll also learn how to troubleshoot, trace errors, and fix problems. Instant access. See details here.