TheCalculatory
Financial · Everyday Money Formula verified

Simple Interest Calculator

Enter a principal, an annual rate and a length of time to see the interest earned and the resulting total, with the formula and step-by-step math underneath.

Solve for
$
$0$50k$100k
%
0%15%30%
years
0yr20yr40yr
On-screen number pad
Tap to type into the highlighted field
Interest earned
$900.00
Total: $5,900.00
Principal
$5,000.00
Total balance
$5,900.00

Step-by-step proofCheck by hand

The formula

Simple interest grows in a straight line: the interest earned each year is always the same dollar amount, because it's calculated only on the original principal — never on interest already added. Multiply the principal by the rate (as a decimal) by the number of years, and that's the total interest. Add it back to the principal for the final balance.

Not the same as compound interest
Compound interest reinvests each period's earnings, so later interest is calculated on a growing balance instead of the fixed original principal. See the Compound Interest Calculator for that comparison.

The formula

I = P × r × t  ·  total = P + I

Worked example

$5,000 at 6% for 3 years: interest = 5,000 × 0.06 × 3 = $900.00, and the total balance = 5,000 + 900 = $5,900.00.

Frequently asked questions

How is simple interest different from compound interest?
Simple interest is only ever calculated on the original principal — the interest itself never earns more interest, so the balance grows in a straight line. Compound interest reinvests each period's interest back into the balance, so later interest is calculated on a bigger number than the original principal, and the balance grows on a curve instead of a line. See the Compound Interest Calculator for the comparison.
Where is simple interest actually used?
It shows up in short-term loans, some auto loans, certain bonds, and basic interest calculations taught in finance courses. Most everyday savings accounts and credit cards actually use compound interest, even though the underlying rate is quoted the same way, so it's worth checking which method applies before assuming.
Does the rate need to be a whole number?
No — enter a rate like 4.5 for four and a half percent, or even 0.75 for a small fractional rate. The calculator accepts decimals for the rate and for time (1.5 years is perfectly valid), and computes the exact interest for whatever numbers you give it.
Sources and method
  • Simple interest formula (I = P × r × t) — general published mathematics and finance.
Last reviewed: 20 Sep 2026 Sources last verified: 20 Sep 2026 Results use the assumptions explained on this page. Report an error How we check calculations

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