Simple Interest Calculator

What “Simple” Interest Means

Simple interest is the most basic kind: you earn (or owe) the same fixed amount each year, worked out from the starting amount only. Unlike compound interest, the interest is never added back to earn more on itself - so the growth is steady and straight-line, not a snowball.

The bar under the calculator splits the total into the principal (the money you started with, in blue) and the interest it earned (in green).

Simple Interest Formula

Simple interest uses the starting principal only:

$$\text{interest} = \frac{\text{principal} \times \text{rate} \times \text{time}}{100}$$

The total amount is:

$$\text{total} = \text{principal} + \text{interest}$$

Worked Examples

Principal	Rate	Time	Interest	Total
5,000	6%	3 years	900	5,900
800	5%	2 years	80	880
12,000	4.5%	1 year	540	12,540

When Simple Interest Is Used

• Basic school math problems.
• Short-term estimates.
• Some informal loans.
• Comparing simple interest with compound interest.

FAQ

What is the difference between simple and compound interest?

Simple interest does not earn interest on earlier interest. Compound interest adds interest to the balance and then earns more interest on that larger balance.

Can I use months instead of years?

Yes. Convert months to years first. For example, 6 months is 0.5 years.