FINANCIAL · SIMPLE INTEREST
Simple Interest Calculator
Calculate simple interest earned or charged on a loan or deposit using the formula I = P × r × t.
Interest earned (I = P × r × t)
$100.00
Principal$1,000.00
Interest$100.00
Total (P + I)$1,100.00
About This Calculator
Calculate how much interest a loan or deposit earns using the simple interest formula I = P × r × t. Enter the principal, annual interest rate, and time period in years to see the total interest and final amount.
How It Works
Enter the principal (starting amount), the annual interest rate as a percentage, and the time period in years. Simple interest is calculated directly — interest does not compound (it is not added back to the principal each period). This makes it ideal for short-term loans, bonds, and illustrative comparisons.
The Formula
I = P × r × t
- I
- Interest earned or charged
- P
- Principal (initial amount)
- r
- Annual interest rate as a decimal (e.g. 0.05 for 5%)
- t
- Time in years
Frequently Asked Questions
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus accumulated interest — so interest earns interest. Over time, compound interest grows significantly faster.
- What types of loans use simple interest?
- Many auto loans, short-term personal loans, and some student loans use simple interest. Mortgages and savings accounts typically use compound interest.
- Can I enter fractional years?
- Yes — you can enter decimal values like 0.5 for six months or 1.25 for 15 months to calculate interest for partial years.