Simple Interest Calculator
Calculate non-compounding simple interest.
Inputs
Output
Fill in every field to see the interest.
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About Simple Interest Calculator
The Simple Interest Calculator works out interest that is charged or earned only on the original principal, never on accumulated interest. Simple interest is used for some short-term loans, certain bonds and many classroom examples.
How to use it
- Enter the principal amount.
- Enter the annual interest rate as a percentage.
- Enter the time period in years.
- Read the interest and the total amount (principal plus interest).
Good to know
- The formula is principal × rate × time. For 5,000 at 5% for 3 years, the interest is 750 and the total is 5,750.
- Because interest is never added to the principal, simple interest grows in a straight line, unlike compound interest.
- Fractions of a year are allowed, for example 0.5 for six months.
Common questions
When should I use compound interest instead?
Most savings accounts, investments, credit cards and mortgages compound. Use the Compound Interest Calculator for those, and this tool when the terms state simple interest.
Is simple interest better for borrowers?
For the same rate and term, simple interest costs less than compound interest, because interest is never charged on earlier interest.