Simple Interest Calculator

What is simple interest calculator?

Simple interest is calculated only on the original amount, not on interest that was added earlier. It is used for short loans, some car and personal loans, bonds and basic savings examples.

This calculator accepts time in years, months or days, so you can work out interest for any period.

How to use the simple interest calculator

1. Enter the principal, the yearly rate and the time.
2. Choose the unit of time.
3. Read the interest and the total amount.

How the simple interest calculator works

Interest equals principal times rate divided by 100 times time in years. The total amount equals the principal plus the interest. Months are divided by 12 and days by 365 to get years.

Worked example

Common uses of the simple interest calculator

• Checking interest on a short personal loan.
• Working out the return on a fixed deposit with simple interest.
• Teaching interest in school math.
• Comparing a simple interest offer with a compound one.
• Estimating late payment interest.

Tips and common mistakes

Check whether your loan uses simple or compound interest. The difference grows with time.

For savings that earn interest on interest, use the compound interest calculator instead.

Background: what to know before you rely on it

Simple interest is the oldest and most basic way of charging for money. It grows in a straight line, with the same amount added every period. Compound interest grows in a curve because the base grows. Over short periods and low rates, the two are almost the same, but over decades the difference is huge. Lenders sometimes use simple interest for car loans or short term loans because it is easy to explain, while savings accounts and credit cards use compound interest. When you compare offers, convert them to the same basis, such as the annual percentage rate, so you can see the real cost.

Private, free and fast

This tool runs entirely in your browser. What you type or choose is not uploaded to a server and is not saved after you close the page, which keeps it fast and private. It is free to use as often as you like. See more in all finance calculators, or browse the full list of tools.

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Results are for information and education. For legal, financial, medical or security decisions, check with a qualified professional. Estimates only. Confirm with your lender or accountant.