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Simple Interest Calculator

Simple interest is charged only on the original amount. Enter the principal, rate and time to get the interest and total.

Your numbers

Result

Estimate for information only, not professional advice. Last reviewed .

How we calculate it

Simple interest is I = P × r × t, where P is the principal, r the annual rate as a decimal and t the time in years. The total amount is P + I.

For a period in months, divide the months by 12 to get years. For days, divide by 365.

Assumptions and limits

  • Simple interest does not compound, so it grows in a straight line. Use the compound interest calculator if interest is added to the balance.
  • Some short-term loans and bonds use simple interest; most savings accounts and credit cards compound.

Frequently asked questions

What is the simple interest formula?

Interest equals principal times rate times time (I = P × r × t), with the rate expressed as a decimal and time in years.

How is simple interest different from APR?

APR expresses the yearly cost of borrowing including certain fees. A simple interest loan charges interest only on the unpaid principal; the calculator above shows the interest over a fixed period on a fixed principal.

Can I use it for months?

Yes. Enter the months divided by 12 as the time. Nine months is 0.75 years.

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Worked example (a fixed example using the starting numbers, it does not change as you type)

Inputs: Principal ($) = 5000; Annual interest rate (%) = 4.5; Time (years) = 3.

  • Interest $675.00
  • Total amount $5,675.00

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Last reviewed: . Formulas and assumptions are described on our methodology page. For information only; not professional advice.