Simple Interest Calculator
Calculate simple interest (I = P × r × t) and the total, or solve for the principal, rate or time. Yearly or monthly rates, time in years, months and days, a schedule and a compound-interest comparison.
How it works
I = P × r × t · A = P × (1 + r × t) · P = A ÷ (1 + r × t) · r = (A ÷ P − 1) ÷ t · t = (A ÷ P − 1) ÷ r
Simple interest never compounds: the same interest accrues every year on the original principal only. P is the principal, r the yearly rate as a decimal (a monthly rate is multiplied by 12), t the time in years and A the total at the end. Time can be entered as years plus months plus days; months count as twelfths of a year and days as 1/365 of a year, or 1/360 if you choose the banker’s year under More options. Because the formula has four quantities, you can solve for any one of them from the other three: the interest, the principal you would need, the rate a loan or deposit really carries, or how long it takes to reach a total. The comparison line shows what the same money would become with compound interest.
Worked example
$5,000 at 6% a year for 3 years earns 5,000 × 0.06 × 3 = $900 of interest, for a total of $5,900 — $300 a year, $25 a month or about $0.82 a day. Working backwards, a total of $5,900 after 3 years at 6% means a principal of 5,900 ÷ (1 + 0.06 × 3) = $5,000. With monthly compounding the same deposit would reach $5,983.40, $83.40 more. A loan of $1,000 at 2% a month for 6 months costs 1,000 × 0.24 × 0.5 = $120.
Frequently asked questions
Where is simple interest actually used?
Short-term personal loans, many auto loans, bond coupons, some savings bonds and certificates, and many legal interest calculations such as late-payment or court-judgment interest.
Simple vs compound — how big is the difference?
Over short periods, small. Over decades, enormous: compounding earns interest on interest, simple interest never does. The comparison line in the chart shows the gap for your numbers.
How do I enter months or days?
Use the Plus months and Plus days fields; they are added to the years. Nine months is 0 years plus 9 months (t = 0.75), and 90 days is 90 ÷ 365 = 0.2466 years, or 0.25 years on a 360-day basis.
My loan quotes a monthly rate. What do I do?
Set "Rate is charged" to Per month. A 2% monthly rate is 24% a year in simple-interest terms; the calculator converts it and shows both.
How do I find the rate a deal really charges?
Choose Solve for: Rate, then enter the amount borrowed, the total repaid and the time. For example, borrowing $22,000 and repaying $26,800 after 4 years is a simple rate of 5.455% a year.
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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.