Simple Interest Calculator
Calculate simple interest — or solve for principal, rate, or time — on any amount over years, months, or days.
Choose what to solve for — that field becomes the result
Interest Earned
$1,500.00
Principal
$10,000
The amount invested or borrowed
Total Interest
$1,500
5.00% for 3.00 years
Total Amount
$11,500
Principal + interest
With compound interest at the same 5.00% rate, you'd earn $1,615 instead of $1,500 — that's $115 more. See the Compound Interest Calculator.
The calculation
Interest = Principal × Rate × Time
$1,500 = $10,000 × 5.00% × 3.00 yr
Simple vs. Compound Interest
Simple interest grows in a straight line; compound interest curves upward as it earns interest on its own interest.
📊 Year-by-Year Breakdown
Simple interest is charged on the principal only — it never compounds. It is most common on short-term loans, promissory notes, and some bonds. For interest that earns interest, use the Compound Interest Calculator.
How to use this calculator
- Choose what to solve for — Interest, Principal, Rate or Time. The variable you pick becomes the result; the other three become inputs.
- Enter the three known values — for example, to find interest, enter principal, rate and time. Time can be entered in years, months or days.
- Read the result — the solved value appears as the headline figure, with the full picture (principal, interest, total amount) below it.
The accumulation table shows how simple interest builds up in a straight line, and the chart compares it against what compound interest would earn over the same period.
How it works
Simple interest uses one formula:
Interest = Principal × Rate × Time
Interest is calculated only on the original principal. It is never added back to the balance to earn further interest — that is what separates simple interest from compound interest. As a result, the same amount of interest is earned every year, and the total grows linearly.
Because the formula has four variables, knowing any three gives the fourth:
- Interest = P · r · t
- Principal = I ÷ (r · t)
- Rate = I ÷ (P · t)
- Time = I ÷ (P · r)
If your money actually compounds — as in a savings account — simple interest will understate the result; the Compound Interest Calculator is the right tool there.
Frequently Asked Questions
What is simple interest? ▾
Simple interest is interest calculated only on the original principal — it does not earn interest on previously earned interest. The formula is I = P · r · t, where P is the principal, r is the annual rate, and t is the time in years. Because it never compounds, simple interest grows in a straight line.
How is simple interest different from compound interest? ▾
Simple interest is always charged on the starting principal alone. Compound interest is charged on the principal plus all interest accumulated so far, so it grows faster and faster. Over short periods the difference is small; over long ones it is large. For compounding, use the Compound Interest Calculator instead.
Can this calculator solve for the rate or time? ▾
Yes. The formula I = P · r · t rearranges, so you can solve for any of the four variables. Pick what you want to find — Interest, Principal, Rate or Time — enter the other three, and the calculator returns the unknown.
Where is simple interest actually used? ▾
Simple interest appears in some short-term personal loans, certain car loans, many bonds (coupon interest), and short promissory notes. Savings accounts and most long-term loans use compound interest, not simple interest.
What does 'total amount' mean? ▾
The total amount, sometimes called the maturity value, is the principal plus all the simple interest earned over the period — what you would have at the end, or owe at the end, depending on whether you are saving or borrowing.
Can I enter the time in months or days instead of years? ▾
Yes. The time field has a years / months / days toggle. The calculator converts whatever you enter into years before applying I = P · r · t, so a 90-day note and a 0.25-year note give the same interest. This is handy for short promissory notes and car loans quoted in months.