Simple Interest Calculator
This simple interest calculator finds the interest and total amount on a loan or deposit from the principal, the annual rate, and the time in years, months, or days. Enter the three values and the simple interest calculator returns the simple interest, the total amount, and the interest per year, using I = P x R x T.
Results
The Simple Interest Calculator is part of our Loans & Credit collection. Browse more loans & credit to size, convert, and check your work alongside this tool.
What the simple interest calculator shows
Simple interest is charged or earned only on the original principal, never on interest that has already built up. The simple interest calculator multiplies the principal by the rate and the time to give the simple interest amount, then adds it to the principal for the total. Because the interest is the same every year, simple interest is easy to plan around.
Simple interest formula used by the calculator
P is the principal, R the annual rate in percent, and T the time in years. Months are divided by 12 and days by 365. The interest grows in a straight line with time: twice as long means twice the interest.
Simple interest calculator example
$5,000 at 6 percent a year for 3 years:
The interest is $300 every year. Over 18 months instead, choose months and the simple interest calculator gives $450, for a total of $5,450.
How to use the simple interest calculator
Enter the principal, the annual interest rate in percent, the time, and the time unit. The simple interest calculator returns the interest, the total amount, and the interest per year. It also works as a loan calculator for simple interest and a simple interest time calculator. Choose months or days when the term is short; the tool converts the time to years before applying the rate, so you can calculate daily simple interest or a term of a few months just as easily.
Reading the simple interest amount
The simple interest is the extra paid or earned, and the simple interest percentage of the principal is R × T; the total amount is what is repaid or held at the end. Simple interest suits short loans, many car loans, bonds that pay fixed coupons, and quick estimates. Savings accounts usually compound instead, so they earn slightly more than simple interest over the same period.
When to use the simple interest loan calculator
- Checking a short-term or personal note with the simple interest loan calculator
- Working out interest on a deposit or bond coupon
- Finding simple interest for a term in months or days
- Solving finance and maths homework
Common simple interest calculator mistakes
- Leaving time in months. The rate is annual, so convert months or days to years.
- Dividing by 100 twice. Use 6, not 0.06, with the ÷100 form.
- Confusing interest and total. The total includes the principal.
Tips for accurate results
- Check whether the lender uses 360 or 365 days.
- Compare against compound interest for long terms.
- Round only the final answer.
Simple interest rate calculator: finding R, P, or T
The same formula works backwards. To use it as a simple interest rate calculator, divide the interest by the principal and the time: R = I × 100 ÷ (P × T). To find the principal, divide the interest by the rate and time; to find the time, divide the interest by the principal and the rate. Knowing any three values gives the fourth. When you want the yearly growth rate between a starting and ending value instead, the CAGR calculator finds it with compounding.
Calculate daily simple interest
To calculate daily simple interest, divide the annual rate by 365 and multiply by the principal: $5,000 at 6 percent earns about $0.82 a day. Some lenders use a 360-day year, which raises the daily figure slightly, so check the loan terms.
Simple interest calculator reference
| Principal | Rate | Time | Interest | Total |
|---|---|---|---|---|
| $1,000 | 5% | 2 years | $100 | $1,100 |
| $5,000 | 6% | 3 years | $900 | $5,900 |
| $5,000 | 6% | 18 months | $450 | $5,450 |
| $20,000 | 8% | 5 years | $8,000 | $28,000 |
Simple Interest Calculator FAQ
What is the simple interest formula?
I = P × R × T ÷ 100, where P is the principal, R the annual rate in percent, and T the time in years.
How do I find simple interest for months?
Divide the months by 12 to get years, then apply the formula. The calculator does this when you choose months.
Is simple interest paid only on the principal?
Yes. Simple interest is paid only on the original principal, never on earlier interest.
How do I find the simple interest rate?
Rearrange the formula: R = I × 100 ÷ (P × T).