Simple Interest Calculator
With simple interest, interest is always charged on the original principal — no "interest on interest". Enter the principal, the rate and the time to see the interest and the total, and compare it with compounding.
Your numbers
Result
- Principal
- $1,000.00
| Item | Value |
|---|---|
| Principal | $1,000.00 |
| Interest (5% × 3 yr) | $150.00 |
| Total | $1,150.00 |
How to calculate simple interest
The formula is I = P × r × t, where P is the principal, r the rate per period and t the number of periods. The total is P + I. So $1,000 at 5% a year for 3 years earns 1,000 × 0.05 × 3 = $150, for a $1,150 total. Keep the rate and time in the same unit — both yearly, or both monthly.
Simple vs. compound interest
Simple interest is always on the original amount, so it grows in a straight line. Compound interest earns on the interest too, so it grows exponentially. Over short periods the difference is small; over long ones it is huge. Most loans and investments actually use compound interest.
Where simple interest shows up
You still see it in some short-term loans, certain bonds, and quick day-to-day estimates. But watch out: a contract quoting a "simple" rate may compound in practice. When comparing borrowing costs, look at the APR and the total you actually repay.
Informational and educational result. Not a substitute for professional advice.
Frequently asked questions
Sources
- Simple interest (I = P × r × t)
Related calculators
Compound Interest
See how compound interest grows your money over time, with an optional monthly contribution. Compare what you put in against what the interest adds.
CalculateFinanceFuture Value
Project what a sum today will be worth in the future with compound growth: enter the present value, the rate and the time to see the future value and interest earned.
CalculateFinanceSavings
See how a savings account grows from a starting balance, monthly deposits and an annual rate (APY). Compare what you put in against the interest earned.
Calculate