💵 Simple Interest Calculator
Simple interest is charged only on the original principal, never on accumulated interest, which makes it common for short-term loans and some savings products. The formula is refreshingly direct: multiply the principal by the annual rate by the number of years.
Because nothing compounds here, the interest grows in a straight line. If your product compounds instead, use the savings or compound interest calculator for the correct figures.
How to use this calculator
Enter the principal, the annual interest rate and the number of years to find the simple interest and the total of principal plus interest.
- Enter the Principal amount of money involved.
- Type the Annual interest rate as a percentage.
- Set the Time in years (fractions like 1.5 are allowed).
- Press Calculate to see the interest and the total repayment.
Frequently asked questions
What is simple interest?
It is interest charged only on the original principal, never on previously earned interest. The formula is principal times rate times time, so it grows in a straight line.
Can you show an example?
On a $10,000 principal at 5% for 3 years, the interest is $10,000 x 0.05 x 3 = $1,500, and the total is $11,500.
When is simple interest used instead of compound interest?
For short-term loans, some auto loans, and certain savings products where the contract specifies interest on the original balance only. Most long-term investing compounds.
Does the calculator handle partial years?
Yes. Enter fractions like 2.5 years and the interest scales proportionally, since simple interest is linear in time.