Simple Interest
Calculate simple interest on a principal amount over time.
About Simple Interest
Simple interest is charged only on the original principal, so it grows in a straight line rather than compounding. It is a useful baseline to compare against compound interest products. Most bank products compound, so simple interest typically understates costs on loans and understates earnings on savings.
Formula
Simple Interest
Interest = P x r x t
- P
- principal
- r
- annual rate
- t
- years
Worked example
With the default values below, Simple Interest returns Interest of $150.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Principal
- 1,000
- Interest rateaccepts 0–100 %
- 5 %
- Yearsminimum 0
- 3
Results
- Interest
- $150.00
- Total Amount
- $1,150.00
- Interest per Year
- $50.00
Step by step
- 1Values used
- 2Simple Interest
- 3Interest= 150.00
- 4Total Amount= 1,150.00
- 5Interest per Year= 50.00
Assumptions and limits
- The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Simple Interest calculated?
Interest = P x r x t Simple interest is charged only on the original principal, so it grows in a straight line rather than compounding. It is a useful baseline to compare against compound interest products.
Why does Simple Interest matter?
Most bank products compound, so simple interest typically understates costs on loans and understates earnings on savings.
What values do I need to enter?
This calculator takes 3 inputs: Principal, Interest rate, Years. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.