Simple Interest Calculator
Interest on the original amount only, with no compounding.
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Simple Interest Calculator by TheCalcTools
How the Simple Interest Calculator works
Enter the principal, the annual rate and the number of years.
Simple interest is the same every year because it is calculated on the original principal only.
Add the interest to the principal for the total owed or earned.
The formula
Worked example
Using the default values shown in the calculator:
| Principal | $5000 |
|---|---|
| Annual interest rate | 6 % |
| Time (years) | 3 |
- I = 5,000 × 0.06 × 3 = $900.00.
- Total amount = 5,000 + $900.00 = $5,900.00.
Result:
| Interest | $900.00 |
|---|---|
| Total amount | $5,900.00 |
| Interest per month | $25.00 |
Frequently asked questions
When is simple interest used?
For short-term loans, some bonds and car or personal loans where interest is not compounded. Most savings accounts and credit cards compound.
How is it different from compound interest?
Compound interest also earns interest on previously earned interest, so it grows faster over time.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.