Doing the math and crunching the numbers when it comes to figuring out your loan's interest can be complicated. Here's how to calculate interest on a loan.

The formula for simple interest requires your initial principal balance, annual interest rate, and time in years. Alyssa Powell/Insider Variables in a formula To use a simple interest calculator ...

For example, if you borrow $1,000 from a friend and agree to pay 6% simple interest for two years, the formula above tells you that you'll pay $120 in total interest ($1,000 x 0.06 x 2).

Here’s how a simple interest calculator work A simple interest rate calculator has a formula box, as described above. The inputs entered here are used in the mathematical formula: A = P (1+rt), where ...

To calculate how much you'll pay in simple interest, multiply the principal (P) by the interest rate (R) by the time period in years (T), then divide that number by 100.