Simple Interest Calculator
Calculate simple interest and total repayment amount on a principal, rate, and time period.
About the Simple Interest Calculator
Simple interest is the most basic way to calculate the cost of borrowing or the return on lending money: interest accrues only on the original principal, never on interest already earned. It is common for short-term loans, certain bonds, and some promotional financing offers. This calculator returns the total interest and the final amount owed or earned.
How It Works
The calculator multiplies the principal by the annual interest rate and by the number of years, giving total interest directly with no compounding steps involved. Adding that interest back to the principal gives the total amount due at the end of the period.
Interest = P × r × t, where P is principal, r is the annual rate (as a decimal), and t is time in years. Total = P + Interest.
Worked example
Scenario: $5,000 at 5% simple interest for 3 years.
- Yearly interest: $5,000 × 5% = $250.
- Interest over 3 years: $250 × 3 = $750.
- Total amount: $5,000 + $750 = $5,750.
Result: $750 of interest and $5,750 in total. Compounded yearly instead, the same deposit would reach $5,788.13.
Simple interest vs compound interest
Simple interest is calculated only on the original principal. Compound interest can also earn or charge interest on accumulated interest, so the two methods diverge as time passes. Confirm which method applies before using the result for a real account or agreement.
Tips and common mistakes
- Simple interest is used for some car loans, short-term notes and bonds that pay out interest instead of reinvesting it.
- For periods shorter than a year, enter the time as a fraction — 6 months is 0.5.
- Savings accounts almost always compound, so use the Compound Interest Calculator for them.
Assumptions & Limitations
- Interest is assumed to accrue evenly and linearly over the full time period.
- The rate is treated as constant for the entire duration entered.
- Not appropriate for loans or investments that compound — use the Compound Interest Calculator for those.
- Partial-year periods are handled as a decimal fraction of a year, not by exact day count.
Sources and review
Method: Simple interest I = P × r × t, with no compounding.
Sources:
- U.S. Securities and Exchange Commission, Investor.gov financial education resources.
Last reviewed: October 2026 by Faheem Ali, founder of CalculatorAnything. The method and examples are provided for transparency; results remain estimates and may contain errors.
Results are estimates for planning and comparison, not financial advice or a lender's quote. Rates, fees, tax rules and regulations vary by country and change over time; confirm figures with your lender or a licensed adviser. Spotted an error? Tell us — see our editorial policy for how corrections are handled.