Simple Interest Word Problem Calculator
Solve for interest, principal, rate or time in a simple-interest problem using I = P·R·T — pick the unknown and see the rearranged formula.
How it works
I = P·R·T ÷ 100 · P = 100I ÷ (R·T) · R = 100I ÷ (P·T) · T = 100I ÷ (P·R)
Simple interest grows only on the original principal, never on interest already earned, so it is a single product: principal times rate times time. Because it is one equation with four quantities, knowing any three pins down the fourth — you just divide to isolate the one you want. The rate is entered as a percent, which is why the formula carries a division by 100.
Worked example
Deposit $1,000 at 5% simple interest for 3 years. Interest = 1000 × 5 × 3 ÷ 100 = $150, so the total grows to $1,150. Working backwards, $150 of interest on $1,000 over 3 years implies 100 × 150 ÷ (1000 × 3) = 5%.
Frequently asked questions
How is simple interest different from compound interest?
Simple interest is charged only on the original principal, so it grows in a straight line. Compound interest adds each period’s interest to the balance, so later interest is earned on earlier interest, curving upward over time.
What time unit should I use?
The rate and time must match. With an annual rate, enter time in years — 6 months is 0.5. If your rate is monthly, enter months instead.
Can I find the rate a loan really charged?
Yes — set “Solve for” to rate, enter the principal, the interest paid and the time, and it returns the simple annual rate. Note this ignores compounding and fees, so a real loan’s APR may differ.
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Educational estimate of simple interest, not financial advice.