1. What is Simple Interest?

Simple interest is a method of calculating the interest charge on a loan or savings based on the original principal amount. It's commonly used by KCB for certain types of accounts and loans.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( Principal \) — Original amount in Kenyan Shillings
• \( Rate \) — Annual interest rate (percentage)
• \( Time \) — Time period in years

Explanation: The formula calculates interest as a percentage of the principal amount that accrues over time.

3. Importance of Interest Calculation

Details: Understanding interest calculations helps borrowers know their repayment obligations and helps savers understand their potential earnings.

4. Using the Calculator

Tips: Enter principal amount in KES, annual interest rate as a percentage (without % sign), and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does KCB use simple or compound interest?
A: It depends on the product. Most loans use compound interest, but some savings accounts may use simple interest.

Q2: How often is interest calculated?
A: For simple interest, it's typically calculated annually, but terms may vary by product.

Q3: Is this calculator accurate for all KCB products?
A: This calculates simple interest only. Check with KCB for specific product terms.

Q4: Can I calculate monthly interest?
A: Yes, enter time as a fraction of year (e.g., 3 months = 0.25 years).

Q5: Are there fees not included in this calculation?
A: Yes, this doesn't account for any service charges or fees that may apply.