Simple Interest Calculator

1. Enter the principal, annual interest rate and time.
2. Read the highlighted result first, then the breakdown below it. Load the worked example to check the math by hand.

Simple interest grows in a straight line: the same amount of interest accrues every year because it is always calculated on the original principal.

• Interest = principal × (rate ÷ 100) × years
• Total = principal + interest

Total interest is what the principal costs (or earns) over the period with no compounding.

Common mistakes and assumptions

• Entering months as years.
• Using simple interest for compounding accounts.
• Entering the rate as a decimal instead of a percent.

$10,000 at 6% simple interest for 3 years.

1. 1Interest per year = 10,000 × 0.06 = $600.
2. 2Interest over 3 years = 600 × 3 = $1,800.
3. 3Total = $11,800. Compounded annually, it would be $11,910.16.

What is the simple interest formula?

I = P × r × t: principal times the annual rate (as a decimal) times the time in years.

How is simple interest different from compound interest?

Compound interest adds interest to the balance so later interest is charged on earlier interest. Simple interest never does, so it grows more slowly.

Are car loans simple interest?

Many are simple-interest amortizing loans: interest accrues on the current balance, not the original amount. Use the Auto Loan Calculator for the monthly payment on those.

How do I use months or days?

Convert to years: 9 months = 0.75 years; 90 days ≈ 90 ÷ 365 = 0.2466 years.