Simple Interest Calculator

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This is simple, non-compounding interest: it's calculated once on the original principal for the whole term, not recalculated on a growing balance. For anything that compounds, like most savings accounts and investments, use the Compound Interest Calculator instead.

This free simple interest calculator finds the interest earned and total amount from a principal, annual interest rate, and time in years, using simple (non-compounding) interest. Nothing you enter is sent anywhere or stored.

How to Use It

  1. Enter the principal amount.
  2. Enter the annual interest rate and the time in years.
  3. The interest earned and total amount update instantly, no submit button.

How It Works

Simple interest is calculated once, directly on the original principal, for the entire time period. Unlike compound interest, which recalculates interest on a growing balance each period, simple interest never earns interest on interest: the dollar amount earned each year stays exactly the same for the whole term.

Formulas

interest = principal × (annual rate ÷ 100) × years

total amount = principal + interest

A worked example: a $1,000 principal at a 5% annual rate for 3 years earns 1,000 × 0.05 × 3 = $150.00 in interest, for a total amount of $1,150.00. A $5,000 principal at 4.5% for 2.5 years earns 5,000 × 0.045 × 2.5 = $562.50 in interest, for a total of $5,562.50.

Everything runs client-side in your browser. Nothing you enter is sent anywhere or stored.

Frequently Asked Questions

How is simple interest different from compound interest?

Simple interest is calculated once on the original principal for the entire term, so it earns the same dollar amount every year. Compound interest is calculated on the principal plus all interest already earned, so each year's interest is larger than the last as the balance grows. Simple interest grows in a straight line; compound interest curves upward.

Why do simple and compound interest produce increasingly different results over time?

Because compound interest earns interest on interest, and that effect compounds (in the literal sense) with every additional period. Over a short term the two are close, but the gap widens the longer the money sits, since compound interest keeps adding a larger and larger base to earn from while simple interest keeps earning from the same original principal.

Where does simple interest actually show up in real life?

Some auto loans, short-term personal loans, and certain bonds and promotional financing offers use simple interest. It also shows up constantly in introductory finance and math coursework, since the formula is straightforward to calculate and explain by hand before compound interest is introduced.

Why doesn't this calculator have a monthly contribution field like the Compound Interest Calculator?

Simple interest is defined as a single calculation on a fixed principal over a fixed term, so there is no growing balance for a contribution to compound against. Adding money partway through the term would need its own separate simple-interest calculation for that portion, not a single combined figure, which is why this tool stays focused on principal, rate, and time.

Can I use a fractional number of years, like 2.5?

Yes. The time field accepts decimals, so 2.5 years (two and a half years) or 0.5 years (six months) both work directly, without needing to convert to months first.