Simple Interest Calculator
Work out interest charged on the principal only, plus the total amount due.
Simple interest is the most basic way to calculate the cost of borrowing or the return on a deposit: interest is charged on the original principal only, and never on interest already accrued. Enter the principal, the annual rate, and the time period, and this calculator shows the interest and the total amount due. It's the model used for many short-term loans and some bonds. The calculation runs entirely in your browser.
The formula
Simple interest multiplies the principal by the rate and the time:
Interest = P × (R ÷ 100) × T
P is the principal, R is the annual rate as a percentage, and T is the time in years. For a $5,000 loan at 5% for 3 years, the interest is 5,000 × 0.05 × 3 = $750, making the total repayable $5,750. Because the base never changes, the interest is the same in every period — unlike compound interest, which grows on itself.
When simple interest applies
Make sure the rate and the time use the same unit. This tool treats the rate as annual and the time in years, so a six-month period is entered as 0.5. Simple interest generally costs a borrower less than compound interest at the same rate, which is why it tends to appear on shorter-term products. Longer-term loans, credit cards, and most savings accounts compound instead, so check which method a lender or bank actually uses before comparing offers.
Frequently Asked Questions
How is simple interest different from compound interest?
Simple interest is charged only on the original principal, so the amount is the same each period. Compound interest is charged on the principal plus any interest already added, so it grows faster over time.
How do I enter a period shorter than a year?
Express it as a fraction of a year in the time field — six months is 0.5, three months is 0.25 — since the rate is treated as annual.
Is this financial advice?
No. It is an information tool for working out interest, not financial advice. Confirm the exact rate, term, and interest method with your lender or bank.
Do you store the values I enter?
No. The calculation happens entirely in your browser and nothing is uploaded or saved.