How is simple interest calculated?

Simple Interest = Principal × Rate × Time (I = PRT).

How is simple interest different from compound?

Simple interest only accrues on the original principal, not on accumulated interest.

Where is simple interest commonly used?

Short-term loans and some basic savings calculations.

Simple Interest Calculator - Interest & Total Amount

Simple Interest Calculator

Calculate interest earned or owed using the simple interest formula I = P × r × t.

Principal Amount

Annual Interest Rate (%)

Time (years)

Interest Earned-

Total Amount-

What Is Simple Interest?

Simple interest is calculated only on the original principal amount, unlike compound interest, which also earns interest on previously accumulated interest. It is commonly used for short-term loans, car loans, and some savings bonds.

Formula

I = P × r × t, where P is the principal, r is the annual interest rate (as a decimal), and t is the time in years. The total amount owed or earned is A = P + I.

How to Use This Calculator

Enter the principal amount you are borrowing, lending, or investing.
Enter the annual interest rate as a percentage.
Enter the time period in years.
Click Calculate to see the interest earned and the total amount.

Worked Example

You deposit $5,000 at a simple interest rate of 5% for 3 years. Interest = 5000 × 0.05 × 3 = $750. Total amount = 5000 + 750 = $5,750. Enter these numbers above to confirm.

Simple vs. Compound Interest

Simple interest grows at a constant rate each year, while compound interest grows faster over time because interest is added to the principal periodically. For interest that compounds, use the Compound Interest Calculator instead.