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.
Example
Scenario: A $5,000 principal at a 5% simple annual rate over 3 years.
Result: Total interest of $750, for a final amount of $5,750.
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.