Simple interest calculator

Simple Interest Calculator

How to use: Enter the principal, the yearly interest rate and the number of years. You see simple interest, the total, and a yearly-compound comparison.

How simple interest works

Simple interest is calculated only on the original amount. The formula is principal times rate times time. This interest calculator also shows yearly compound interest next to it, so you can see how much compounding adds.

Example

$10,000 at 5% for 3 years earns $1,500 in simple interest, for a total of $11,500. With yearly compounding it earns about $1,576, which is about $76 more.

Where simple interest is used

Some short-term loans, car loans and bonds use simple interest. Savings accounts usually compound. The longer the time and the higher the rate, the bigger the gap between the two. For long-term saving, try the compound interest calculator.

Frequently asked questions

What is the formula for simple interest?

Interest equals principal times the yearly rate (as a decimal) times the number of years. For 8 months, use 8 divided by 12 years.

More free calculators

Estimates for education only, not financial advice.