Simple Interest Calculator

Because interest never compounds, the amount grows in a straight line. Over long periods, compound interest produces a larger total than simple interest.

Simple Interest = P × R × T ÷ 100, where P is the principal, R is the annual rate and T is the time in years. Total = Principal + Interest.

Simple interest ignores compounding, so it understates the cost or return of most real-world products, which usually compound. Use the Compound Interest Calculator for those.

10,000 at 5% for 3 years gives interest of 1,500 and a total of 11,500.

1. Enter the principal amount.
2. Add the annual interest rate.
3. Set the time period in years or months.
4. Press Calculate.

• Using a monthly rate where an annual rate is expected.
• Confusing simple interest with compound interest.

Simple interest is calculated only on the original principal, never on accumulated interest. This calculator shows the interest earned or owed and the final total.

Students, borrowers and savers dealing with products that quote simple (flat) interest, such as some short-term loans and fixed deposits.

• Quickly find interest and the total amount due.
• Understand the cost of flat-rate borrowing.
• Check homework and textbook problems.

• Working out interest on a short-term personal loan.
• Estimating returns on a simple fixed deposit.
• Learning the difference between interest types.