Simple interest calculator
Interest on a sum without compounding, and the total to repay or receive.
About this calculator
Use this simple interest calculator to find the interest on a loan or a deposit when interest is charged only on the original amount. Enter the principal, the yearly rate and the time in years, months or days.
It also shows what the same rate would earn with yearly compounding, so you can see how much difference compounding makes over longer periods.
How it works
Simple interest is principal × rate × time (I = P × r × t). Interest is only ever charged on the original amount, never on interest already added.
Last reviewed:
Worked example
- Principal: $10,000
- Interest rate: 5% a year
- Time: 3
- Time in: Years
Interest: $1,500.00
Common questions
What is the simple interest formula?
I = P × r × t, where P is the principal, r is the yearly rate as a decimal and t is the time in years. For example, $10,000 at 5% for 3 years earns $1,500.
What is the difference between simple and compound interest?
Simple interest is charged only on the original amount. Compound interest is also charged on interest already added, so it grows faster the longer the money is left.
Where is simple interest used?
Many car loans and some personal loans charge simple interest on the remaining balance. It is also common in short-term loans, bonds and maths lessons.
Sources and further reading
The story behind it
Where the idea came from: Rules for interest appear in the Code of Hammurabi, written in Babylon almost 4,000 years ago.
Charging a fixed share of a loan for each period of time is one of the oldest ideas in finance. Babylonian law set the highest rates that could be charged on loans of grain and silver. Simple interest is still the easiest way to see what borrowing costs, and the starting point for understanding compound interest.
Why you can trust this calculator
- It runs in your browser. Nothing you type into it is sent anywhere.
- The method is explained on this page, so you can check it yourself.
- Free to use, with no sign-up.
- Results are estimates, not financial advice.
- Spotted a mistake? Tell us and we'll look into it.
After 15 years as a mathematics educator, I built CalculStore to give students, teachers, professionals and anyone working with numbers simple, reliable tools.
Meet the founder