Simple Interest Calculator
Work out simple interest: the interest earned or owed, and the total amount, from a principal, a yearly rate and a time. You can also solve for any of the other three values: the rate, the time needed, or the principal.
Result
Enter the principal, the rate and the time.
The calculation runs in this browser tab. Nothing you enter is uploaded, saved or logged.
What is simple interest?
Simple interest is interest worked out only on the original amount, the principal, and never on interest already earned. The interest is the principal times the yearly rate times the number of years: 5,000 at 4.5% for 3 years earns 5,000 × 0.045 × 3 = 675, and the total is 5,675.
Because the interest is the same every year, simple interest grows in a straight line, while compound interest grows faster each year. Simple interest is used for some short-term loans, certain bonds and notes, and many textbook problems. If the interest is added to the balance and earns interest itself, use the compound interest calculator.
How to use the Simple Interest Calculator
- Choose what you want to find: the interest and total, the rate, the time, or the principal.
- Enter the three known values. For the time, choose years, months or days.
- Read the result and the other figures, such as the total amount or the time in years.
- Use Copy result to copy the answer, or Reset to start again.
Formula
- Interest
- I = P × r × t
- Total amount
- A = P + I = P × (1 + r × t)
- Rate
- r = I ÷ (P × t)
- Time and principal
- t = I ÷ (P × r); P = I ÷ (r × t)
Here r is the yearly rate as a fraction (4.5% is 0.045) and t is the time in years. Months are divided by 12 and days by 365.
The interest is rounded to the cent.
Worked example
5,000 lent at 4.5% a year for 3 years. These are the results the calculator gives:
| Question | Result |
|---|---|
| Input: What do you want to find? | The interest and the total amount |
| Input: Principal | 5000 |
| Input: Interest rate per year | 4.5 % |
| Input: Time | 3 |
| Input: Time in | Years |
| Total amount | 5,675.00 |
| Principal | 5,000.00 |
| Interest earned | 675.00 |
| Time in years | 3.0000 |
Assumptions and limits
- Days are converted with a 365-day year (actual/365). Some lenders use 360 days or 30-day months, which changes the interest slightly; the lender’s convention in your contract prevails.
- The calculator assumes the rate is constant and no interest is added to the principal.
- Fees, taxes and payment schedules are not included.
- These results are a calculation from the numbers you enter, not financial advice.
Frequently asked questions
How do I calculate simple interest?
Multiply the principal by the yearly rate (as a decimal) and by the time in years. For 5,000 at 4.5% for 3 years: 5,000 × 0.045 × 3 = 675.
What is the difference between simple and compound interest?
Simple interest is only on the principal. Compound interest is on the principal and on the interest already added. Over time compound interest grows faster; over one year they are the same.
How do I calculate simple interest for months or days?
Convert the time to years: divide months by 12, or days by 365. 18 months is 1.5 years, and 90 days is 90 ÷ 365 = 0.2466 years.
How do I find the interest rate?
Divide the interest by the principal times the time in years. If 5,000 earned 675 in 3 years: 675 ÷ (5,000 × 3) = 0.045, or 4.5% a year.
How long will it take to earn a given amount of interest?
Divide the interest by the principal times the rate. To earn 675 on 5,000 at 4.5%: 675 ÷ (5,000 × 0.045) = 3 years. The calculator also shows it in months and days.
Why might my lender’s figure differ slightly?
Lenders use different day-count conventions, such as 360-day years, and may round differently. The figure in your contract is the one that counts.