Simple Interest Calculator

Calculate simple interest and the final amount on a principal over time.

The formula

Simple interest earned, calculated only on the original principal. Here \(I\) is the total interest, \(P\) the principal (present value), \(r\) the annual nominal rate written as a decimal, and \(t\) the time in years.

$$I = P \times r \times t$$

The ending balance (future value) under simple interest. \(A\) is the future value, \(P\) the principal, \(r\) the annual rate, and \(t\) the time in years.

$$A = P(1 + rt)$$

The principal that grows to a given future value \(A\) under simple interest, where \(r\) is the annual rate and \(t\) the time in years.

$$P = \dfrac{A}{1 + rt}$$

How to use this calculator

  1. Enter the principal — the amount borrowed or invested.
  2. Set the annual interest rate as a percentage.
  3. Enter the number of years.
  4. Read the total interest and the final amount, with a year-by-year table below.

How it works

Simple interest is calculated only on the original principal — never on interest already earned. That makes it grow in a straight line: the same amount of interest is added every year. The formula is $I = P \times r \times t$, where $P$ is the principal, $r$ is the annual rate as a decimal, and $t$ is the time in years. The final amount is $A = P(1 + rt)$.

Because it ignores compounding, simple interest is common for short-term loans, some car loans, and many bonds. Over long periods it grows much more slowly than compound interest, which pays interest on interest.

Worked example

Borrow \$1,000 at a $5\%$ simple annual rate for 3 years. The interest is $I = 1000 \times 0.05 \times 3 = \$150$, so you repay $A = \$1,150$ in total — \$50 of interest each year, every year.

Frequently asked questions

What is simple interest?

Interest charged only on the original principal, not on any interest already accumulated. It grows by the same amount each year.

How is simple interest different from compound interest?

Simple interest never earns interest on interest, so it grows linearly. Compound interest adds each period's interest to the balance, so it grows faster over time.

What is the simple interest formula?

Interest is $I = P r t$ and the final amount is $A = P(1 + rt)$, where $P$ is principal, $r$ the annual rate, and $t$ the years.

When is simple interest used?

Often for short-term or fixed loans, some car loans, and certain bonds, where interest does not compound.

Is this calculator free?

Yes — free, browser-based, and no login required.

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