## What is Interest?

Interest; It is the money received in return for the use of the money lent to a bank or similar institution to operate the money for a certain period of time. Loan and Deposit rates are the two most well-known types of interest.

### What is Loan Interest?

Loan interest is the amount of money borrowed from a bank or similar institutions for a need, added to the principal according to the maturity received. It is money paid in exchange for the operation of money.

The loan interest is calculated by applying interest again to the remaining principal in each payment period. For this, the principal amount and the interest rate are multiplied and the taxes of the country where you will use the loan are added. Generally, the first months of your loan debt are taken as 90% principal 10% interest debt by banks. This ratio is then balanced.

Interest rates vary according to the monetary policy of the countries.

### What is Deposit Interest?

Mevduat faizi, banka veya benzeri kurumlara işletmesi için ödünç verdiğiniz paranın karşılığında bankanın size geri ödediği günlük, aylık veya yıllık para tutarıdır.

Basit faiz hesaplama aracımız ile belirlediğiniz vade sonunda ne kadar faiz ödemesi alacağınızı hesaplayabilirsiniz.

If the interest amount is not withdrawn from the bank, the interest is recalculated by adding it to the principal for the next maturity. You can use the compound interest calculator to calculate this form of interest.

## Simple Interest Calculator

Simple interest is the amount resulting from principal + interest.

Simple interest is the amount calculated as the principal (A), the period (maturity) of the investment (S), and the interest rate you receive (f).

To calculate the value of the interest rate (f), we need to divide the annual interest rate by the maturity date.

You can make interest calculations on an annual, monthly and daily basis. A year is assumed to have 12 months, 52 weeks, and 365 days.

Let's continue with some examples for calculating interest.

Example;- If you keep your money for a year; 𝑠 = (1 𝑦𝚤𝑙)/(1 𝑦𝚤𝑙) = 1
- If you keep your money in the same investment account for two years; 𝑠 = 2 ⁄ 1 = 2
- If you keep your money in the same account for 500 days; 𝑠 = 500/365 = 1.3699
- If you keep your money in the same account for 6 months; 𝑠 = 6/12 = 0.5
- If you keep your money in a 3-month time deposit account; 𝑠 = 3/12 = 0.25

Soru 1,Emma deposited $1000 in a time deposit account with 10% interest rate for one year. How much interest does Emma get at the end of a year?

Solution: 𝐴 = 1000 𝑠 = 1𝐹 = 𝐴 × 𝑓 × s𝑓 = %10 /year = 0,1 / year 𝐹 = 1000 × %10 × 1 = 100 Emma will earn 100 USD simple interest at the end of one year.

Soru 2,Emma is considering depositing her $5,000 into an account with an 8% annual yield for three months. How much return does Emma get at the end of 3 months?

Solution: 𝐴 = 5000 USD𝑠 = 3 Mounth = 3 / 12𝐹 = 𝐴 × 𝑓 × s𝑓 = (%8) / 𝑦𝚤l 𝐹 = 5000 × (%8 𝑥 3) / 12 = 5000 × 0.02 = 100 Emma will earn $100 in revenue after three months.

To make it simpler, Emma asks the bank to borrow $100 for one year at 5% interest.

100$ × %5 = 5$ $5 is the annual interest that Emma will pay. Emma should pay back a total of $105 at the end of one year, as an interest fee of $5 will be added to Anpara.

If Emma wants to repay $100 USD with 5% interest in two years,

(100$ × %5 = 5$)(1.year) + (100$ × %5 = 5$)(2.year) + 100$(principal) = 110$ The total refund will be.

### Annual Interest Calculation Formula

**interest = principal × interest rate × maturity**### Daily or Monthly Interest Calculation Formula

**interest = principal × interest rate × (maturity / frequency)**## FAQ

### How much interest will I pay?

In the simplest way, you can calculate the interest amount as principal x interest rate x maturity. To do this calculation easily, use the simple interest calculator we prepared for you.

### How much interest will my investment earn me?

First of all, you need to learn your interest rate from the bank and decide on your maturity. For example, you will earn 10 dollars per year with 10% interest for 100 dollars. For a more detailed calculation, you can use the interest calculator calculator.

### What does 3% interest mean?

The interest amount is calculated as a percentage of the principal. For example, receiving 3% interest for 1 month on 10,000.00 USD means paying 300.00 USD of interest (accruing/accurring interest) excluding the principal in exchange for using 10,000.00 USD for one month.