Simple interest is charged on the original amount only — never on interest already earned. Enter the principal, the annual interest rate and the time in years, and this tool shows the interest and the final total. It’s the model behind many short-term loans, deposits and late-payment charges. Everything is calculated on your device, in whatever currency you use.
Enter a principal, rate and time to calculate the interest.
Pure simple interest with no fees or compounding. Banks usually quote compound rates and add fees — use this as a baseline, not a quote.
How it works
The formula is I = P × r × t: principal times the annual rate (as a decimal) times the number of years. So 1,000 at 5% for 3 years earns 1,000 × 0.05 × 3 = 150 in interest, for a total of 1,150. Time can be fractional — 1.5 years works — and a 0% rate simply returns the principal unchanged.
Unlike compound interest, the base never grows: each year adds the same fixed amount, because interest isn’t added back to the principal. That makes simple interest cheaper for a borrower and lower-yielding for a saver than compounding over the same rate and term. Money is rounded to two decimals, half away from zero.
Practical examples
A short-term deposit
Put 2,000 at 4% simple interest for 2 years: 2,000 × 0.04 × 2 = 160 in interest, so you get back 2,160. Each year adds exactly 80.
A loan between friends
Lend 5,000 at 6% for 18 months (1.5 years): interest is 5,000 × 0.06 × 1.5 = 450, and 5,450 is repaid in total.
Simple vs compound
10,000 at 10% for 5 years earns 5,000 with simple interest (1,000 a year). Compounded annually it would earn about 6,105 — the gap is interest earning its own interest.
Frequently asked questions
What’s the difference between simple and compound interest?
Simple interest is calculated only on the original principal, so the amount added each period is constant. Compound interest is calculated on the principal plus all previously added interest, so it grows faster over time. Use the compound calculator for savings and long-term loans.
When is simple interest actually used?
Short-term personal loans, some car loans, bonds’ coupon payments, and many late-payment or statutory interest charges use simple interest. It’s also how most textbooks introduce the concept before compounding.
How do I enter the rate?
As an annual percentage — type 5 for 5%, not 0.05. The tool divides by 100 for you. If your rate is monthly, multiply it by 12 first to get the annual figure.
Can I use months instead of years?
Enter the time in years, using decimals for part-years: 6 months is 0.5, 18 months is 1.5, 3 months is 0.25. The formula is defined in years, so converting keeps it correct.
What currency does it use?
None in particular — it’s currency-neutral. Enter dinars, euros or dollars; the interest and total come out in the same unit. Formatting follows your language’s number conventions.
Does it handle a zero interest rate?
Yes. A 0% rate returns interest of 0 and a total equal to the principal — useful for modelling an interest-free arrangement.
Why does my total differ from a bank quote?
Banks usually quote compound interest (and add fees), and instalment loans amortise monthly. This tool is pure simple interest with no fees, so treat it as the textbook baseline, not a bank offer.
How is rounding handled?
The interest and total are rounded to two decimal places, rounding half away from zero (so 1.005 becomes 1.01). Intermediate maths is done at full precision before that final rounding.
Is my data stored?
No. The calculation runs entirely in your browser; nothing is uploaded and analytics never receives your figures.
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