Simple Interest Calculator
Free simple interest calculator. Work out the interest earned and the final balance from a principal, annual rate and term in years or months.
Interest Details
Total Amount
$11,500.00
Breakdown
How It Works
Enter the principal
Type the principal amount — the money you are investing, saving or borrowing.
Set the rate and time
Enter the annual interest rate and the term, choosing whether the term is in years or months.
Review the results
See the simple interest earned and the final total amount (principal plus interest).
Simple interest is the most straightforward way to calculate the cost of borrowing or the return on saving: you earn or owe interest only on the original principal, at a fixed rate, for a set period of time. Because nothing compounds, the interest amount stays constant each year, making it easy to predict exactly what you will pay or receive.
This calculator applies the classic I = P × r × t formula and adds the interest back to the principal to give you the final total. Switch the term between years and months for short-term loans or deposits, and use it to quickly compare flat-rate offers or sanity-check a lender's figures.
Frequently Asked Questions
What is the simple interest formula?
Simple interest is calculated as I = P × r × t, where P is the principal, r is the annual interest rate (as a decimal) and t is the time in years. The final amount is A = P + I. Unlike compound interest, simple interest is charged only on the original principal — never on accumulated interest.
How is simple interest different from compound interest?
Simple interest applies the rate only to the original principal, so the interest each period stays the same. Compound interest applies the rate to the principal plus any interest already earned, so it grows faster over time. For long terms, compound interest yields a noticeably higher balance.
Can I enter the term in months?
Yes. Use the Years/Months toggle to switch units. When you choose months, the calculator converts the value to years (months ÷ 12) before applying the formula, so the result is always accurate for partial-year terms.
When is simple interest used in real life?
Simple interest is common on short-term loans, some car loans, certain bonds, and many "flat rate" personal or installment loans. It is also a quick way to estimate interest when compounding effects are small over a short period.
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