Simple Interest Calculator
Calculate simple interest and total repayment on a principal over time — the I = P × r × t formula.
How it works
I = P × r × t
Simple interest never compounds: the same interest accrues each year on the original principal only. P is the principal, r the annual rate as a decimal, t the time in years.
Worked example
$5,000 at 6% for 3 years earns 5,000 × 0.06 × 3 = $900 interest, for a total of $5,900.
Frequently asked questions
Where is simple interest actually used?
Short-term personal loans, some auto loans, bonds’ coupon math, and many informal or legal interest calculations (court judgments often use it).
Simple vs compound — how big is the difference?
Over short periods, small. Over decades, enormous: compounding earns interest on interest, simple interest never does.
How do I use months instead of years?
Divide months by 12. Nine months is t = 0.75.
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This is an educational estimate, not financial advice. Lenders use their own rounding, fees and credit terms — confirm exact figures with your lender or a licensed advisor.