Simple Interest Calculator
Compute simple interest and the final balance from a principal, annual rate, and time in years.
Example
Deposit a principal of $10,000 at an annual simple interest rate of 5% for 3 years:
I = P x r x t = 10,000 x 0.05 x 3 = $1,500.00 interest.
Total amount = 10,000 + 1,500 = $11,500.00.
How it works
Enter the principal, annual interest rate, and time in years; the tool applies I = P x r x t and adds it to the principal for the total. Results update live as you type.
Good to know
This Simple Interest Calculator works out the flat interest on a lump sum using the formula I = P x r x t, where P is your principal, r is the annual rate as a decimal, and t is the time in years. You enter a principal amount, an annual percentage rate, and a number of years, and it instantly shows the interest earned plus the total amount you would end up with. It is aimed at anyone dealing with products that quote a non-compounding rate, such as some fixed-term loans, promissory notes, bonds, and certain short-term deposits.
Reach for simple interest math when interest is charged only on the starting balance and never added back to grow further. Typical cases include a personal loan with a flat finance charge, a friend-to-friend IOU, a savings instrument advertised as "simple interest," or a quick sanity check before you compare it against a compounding alternative. Because the result scales linearly, doubling the time exactly doubles the interest, which makes it easy to estimate in your head once you see the numbers.
Read the output in three parts: the large figure is interest only, the "Total amount" stat is principal plus that interest, and the two bars show how the final balance splits between what you put in and what the rate added. Watch the proportions over longer terms; even a modest rate can make the interest bar a meaningful slice of the total. The note on the page is the key caveat: this assumes interest does not compound, so it will understate growth for any account that pays interest on interest.
A practical tip: the time field expects years, so convert other periods first, for example 90 days is roughly 90/365 of a year and 6 months is 0.5. If the product you are evaluating actually compounds, use a compound interest or CD calculator instead, since this tool will give a lower figure than you would really see.
Frequently asked questions
How is simple interest different from compound interest?
Simple interest is calculated only on the original principal using I = P x r x t, so the interest each period stays constant. Compound interest is calculated on the principal plus accumulated interest, so it grows faster over time.
How do I handle a time period in months?
Convert months to years before entering the time value. For example, 18 months is 18 / 12 = 1.5 years, so enter 1.5 in the time field.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser; nothing is uploaded.
Is this financial advice?
No. These are educational estimates — consult a qualified financial professional before making decisions.
People also ask
What is the formula for simple interest?
Simple interest is I = P x r x t, where P is the principal, r is the annual interest rate written as a decimal, and t is the time in years. The total amount you end with is the principal plus that interest, or A = P x (1 + r x t).
How do I calculate simple interest on $10,000 at 5% for 3 years?
Multiply 10,000 x 0.05 x 3, which gives $1,500 in interest. Adding that to the principal makes a total amount of $11,500.
How do I convert an interest rate percentage to a decimal?
Divide the percentage by 100, so 5% becomes 0.05 and 7.25% becomes 0.0725. This calculator accepts the rate as a percentage and converts it for you.
Does simple interest favor the borrower or the lender?
Compared with compound interest at the same rate and term, simple interest produces a smaller total, which generally benefits the borrower because interest never accrues on previously charged interest. For a saver, a compounding account would grow faster.
How do I calculate simple interest for days instead of years?
Convert the number of days into years by dividing by 365 (or 360 in some financial conventions), then use that as the time value. For example, 120 days is about 120 divided by 365, roughly 0.329 years.
Can simple interest be used for loans as well as savings?
Yes. The same I = P x r x t formula applies whether you are earning interest on a deposit or paying it on a loan; the result is interest accrued on the original amount only, with no compounding.
What is the difference between APR and a simple interest rate?
A simple interest rate describes interest charged only on the principal, while APR (annual percentage rate) is a standardized yearly cost that can also include fees and may reflect compounding depending on the product. They can match in basic cases but often differ once fees or compounding are involved.
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