Simple Interest Calculator
Find the interest and total amount on a sum at a flat yearly rate, with the time in years, months or days.
About the Simple Interest Calculator
Simple interest is charged or earned only on the original amount, the principal. Unlike compound interest, interest never earns interest, so it grows by the same amount every year.
It is used for many short-term loans, some car loans, bonds' coupon payments and school maths problems. For periods given in days, a 365-day year is used here; some banks use 360 days, which gives slightly more interest.
The formula
I = P × R × T ÷ 100, A = P + I
- I
- interest
- P
- principal (original amount)
- R
- yearly rate in percent
- T
- time in years (months ÷ 12, days ÷ 365)
- A
- total amount at the end
Simple interest on 10,000 at 5% a year
| Time | Interest | Total |
|---|---|---|
| 6 months | 250.00 | 10,250.00 |
| 1 year | 500.00 | 10,500.00 |
| 3 years | 1,500.00 | 11,500.00 |
| 5 years | 2,500.00 | 12,500.00 |
| 10 years | 5,000.00 | 15,000.00 |
How to read your result
- Interest is what the principal earns (or costs) over the period.
- Total amount is principal plus interest.
- The comparison shows how much more compound interest would give over the same time.
Worked example
5,000 at 8% for 18 months
- T = 18 ÷ 12 = 1.5 years
- I = 5,000 × 8 × 1.5 ÷ 100 = 600
- A = 5,000 + 600 = 5,600
Questions people ask
How do I find the rate or time instead?
Rearrange the formula: R = 100 × I ÷ (P × T) and T = 100 × I ÷ (P × R).
Is simple interest better than compound interest?
For a borrower, yes: you pay less. For a saver, compound interest gives more over time.