How to use the Simple Interest Calculator tool
3 simple steps · under a minute
-
Enter the principal
Type the amount borrowed or invested.
-
Add rate and time
Enter the yearly interest rate and the time in years, months or days.
-
Read the interest
See the interest, the total amount and how it compares with compound interest.
About Simple interest calculator
Simple interest is charged only on the original amount, unlike compound interest, which also charges interest on interest. It is used for many car loans, short-term personal loans and some bonds and certificates. This simple interest calculator finds the interest and total amount in seconds.
Enter the principal, the annual rate and the time, and the calculator shows the interest per year, the total interest and the final amount. It also shows what the same money would earn with monthly compounding, which is useful for comparing savings accounts and loans.
Years, months or days
Enter time in whichever unit you have.
Formula shown
Simple interest = principal × rate × time, shown with every answer.
Compare with compounding
See how much more the same money earns with monthly compound interest.
Frequently asked questions
What is the simple interest formula?
I = P × R × T, where P is the principal, R the annual rate as a decimal and T the time in years. Total amount = P + I.
How do I calculate simple interest for months?
Divide the number of months by 12 to get years. Six months is 0.5 years.
What is the difference between simple and compound interest?
Simple interest is paid only on the principal. Compound interest is paid on the principal plus accumulated interest, so it grows faster.
Where is simple interest used?
Commonly in short-term loans, many auto loans, and some bonds and certificates of deposit.
Is this financial advice?
No. It is a calculation aid; your lender or bank’s figures are final.