1. What is Cumulative Interest?

Cumulative Interest is the total amount of interest earned or paid over multiple time periods. It represents the sum of interest from each period when the principal remains constant but the time periods may vary.

2. How Does the Calculator Work?

The calculator uses the cumulative interest formula:

Where:

• \( \text{Principal} \) — Initial amount of money ($)
• \( \text{Rate} \) — Interest rate per period (as decimal)
• \( \text{Time}_i \) — Duration of each period in years

Explanation: The formula calculates interest for each time period separately and sums them all together to get the total interest.

3. Importance of Cumulative Interest Calculation

Details: Calculating cumulative interest helps in financial planning, loan repayment analysis, and investment growth projections. It's essential for understanding the true cost of loans or the potential earnings from investments.

4. Using the Calculator

Tips: Enter the principal amount in dollars, interest rate as a decimal (e.g., 0.05 for 5%), and time periods separated by commas (e.g., "1, 2, 3" for three periods of 1, 2, and 3 years respectively).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and cumulative interest?
A: Simple interest calculates on the original principal for one time period, while cumulative interest sums interest over multiple periods that may have different durations.

Q2: When would I use cumulative interest calculation?
A: Useful for loans with variable payment periods, investments with irregular contribution schedules, or any scenario where the time periods are not uniform.

Q3: Does this account for compounding?
A: No, this calculates simple interest across multiple periods. For compound interest, a different formula would be needed.

Q4: Can I use this for monthly periods?
A: Yes, but convert months to years (e.g., 6 months = 0.5 years) for accurate calculation.

Q5: What if my time periods have different rates?
A: This calculator assumes a constant rate. For varying rates, each period would need to be calculated separately with its specific rate.