Simple Interest Calculator
Calculate interest based only on the original principal, with no compounding. Enter the amount, rate, and time to see total interest and final value.
Calculate simple interest
Enter principal, rate, and time to calculate.
How it works
What this result means
Simple interest is calculated only on the original principal — it does not compound. The total interest earned or owed grows at a constant rate each year, making it easy to calculate manually.
Formula:
Interest = P × R × T
Where:
P = principal (starting amount)
R = annual interest rate as a decimal (e.g. 6% = 0.06)
T = time in years
Total = P + Interest
- Convert the annual rate to a decimal by dividing by 100
- Multiply principal × rate × years
- Add the interest to the principal to get total amount
- To find time or rate, rearrange: T = Interest ÷ (P × R)
Example
$1,000 at 6% for 3 years: Interest = 1,000 × 0.06 × 3 = $180. Total = $1,180.
Use this tool for
- Checking loans or notes that use simple interest
- Working through school or training examples
- Comparing simple interest with compound growth
Common questions
- When is simple interest used in practice? Some short-term loans, bonds, or regulatory calculations use simple interest. Many consumer loans and savings accounts use compound interest instead.
- How do I enter time in months? Convert to years: divide months by 12. For example, 6 months = 0.5 years, 18 months = 1.5 years.
- Does this work for finding principal or rate? This tool solves for interest and total amount given P, R, T. To find P or R, rearrange: P = I/(R-T), R = I/(P-T).