Simple Interest Calculator
Calculate flat-rate interest on a principal amount over time.
Try an example
$1,500.00
About this calculator
How This Simple Interest Calculator Works
Enter a principal amount, an annual interest rate, and a time period, and the calculator returns the interest earned (or owed) and the total amount at the end of the period.
Worked Example
A $10,000 principal at 5% simple interest for 3 years earns $1,500 — for a total of $11,500.
The 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. Interest is calculated only on the original principal for the entire period — it never earns interest on interest already accrued.
Simple vs. Compound Interest
This is the key difference from compound interest: with simple interest, growth is linear — the same dollar amount is earned every year. With compound interest, each year's interest gets added to the balance and starts earning its own interest, so growth accelerates over time. Simple interest is common for short-term loans, certain bonds, and some promotional financing; most savings accounts, investments, and long-term loans use compound interest instead. Try the Compound Interest Calculator to see the difference on the same numbers.
Worked example
A $10,000 principal at 5% simple interest for 3 years earns $1,500 in interest — a total of $11,500, since simple interest never compounds.
Frequently asked questions
What's the formula?
I = P × r × t — principal times the annual rate times the number of years.
How is this different from compound interest?
Simple interest is always calculated on the original principal only; compound interest also earns interest on previously accumulated interest, so it grows faster over time.
Where is simple interest commonly used?
Some auto loans, short-term personal loans, and certain bonds use simple interest — most savings accounts and investments use compound interest instead.
What if the time period isn't in whole years?
Convert it to a decimal (e.g., 6 months = 0.5 years) before calculating.