Simple Interest Calculator
Calculate simple interest on a principal amount over a number of years.
Formula and sources updated · Data sources · 1View algorithm, constants and default inputs (JSON)
About this calculator
Simple interest is calculated only on the original principal: interest = principal × annual rate × time. This calculator does not model compounding, fees, taxes or a lender’s contract terms.
Worked example
calculated with the default values below
Principal 10,000 $ · Annual interest rate 5 % · Time 3 years Simple interest 1,500.00 $ · Total amount 11,500.00 $ · Interest per year 500.00 $
Method and assumptions
Formula basis and scope
Interest = principal × annual percent / 100 × years.
Interest is not compounded; the principal and rate stay constant.
Data sources
Disclaimer
These calculators give estimates for general information only. They are not financial, tax or investment advice and do not take your personal circumstances into account. Before borrowing, investing or filing, confirm the numbers with a qualified adviser in your jurisdiction.
Implementation source
This record describes the implementation used by this page. It is not independent validation. External references, when available, support only the stated formula or definition; estimates and custom rules retain their own assumptions.
Formula and variables
I = P×r÷100×t; A = P + I; I_y = P×r÷100
- P
- Principal
- r
- Annual interest rate (%)
- t
- Years
- I
- Total interest
- A
- Principal plus interest
- I_y
- Interest per year
Simple interest does not capitalise accumulated interest; currency follows the principal input.
Frequently asked questions
Where is simple interest actually used?
Simple interest is a calculation method in which interest is applied to the original principal rather than added to the principal for later periods. Whether a particular loan, deposit or contract uses this method depends on its terms and applicable rules; this calculator does not identify or classify financial products.
How much does it differ from compound interest?
For the same principal, rate and term, this calculator computes interest as principal × rate × time. A compound-interest result also depends on how often interest is added to the balance. Compare the two methods using the same inputs; real products may have fees, payment schedules or terms that neither simple formula represents.