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Simple Interest Calculator

Simple interest is calculated only on the original amount, not on interest already earned. It is used for many short-term loans, some bonds and basic school problems.

How it works Report a problem

Simple Interest

Quickly calculate interest based on the principal amount and rate

$0
Total Interest Earned
Over the full duration
Total Principal
$0
Total Value (A)
$0
Principal vs Interest

Simple interest is the original interest calculation: interest charged or earned on the original principal only, never on interest itself. This calculator applies the classic formula and shows both the interest and the total amount.

How to use this calculator

  • Enter the principal (the starting amount).
  • Add the yearly interest rate.
  • Enter the time in years (or convert months to a fraction of a year).
  • Press calculate to see the simple interest and the final amount.

Simple vs compound, in one picture

Over one year the two are close; over ten they are strangers. Simple interest grows in a straight line while compound interest curves upward, because it earns interest on interest. Many short loans and some bonds use simple interest; most savings growth that impresses people is compound.

Frequently asked questions

What is the simple interest formula?
SI = principal × rate × time, with rate as a decimal and time in years. Total amount = principal + SI.
How do I use months in the formula?
Divide months by 12 to get the time in years. Six months is 0.5, so interest is half a year's worth.
Where is simple interest still used?
Short-term loans, some car loans, certain bonds and many classroom and exam questions, where its transparency is the point.