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Simple Interest Calculator

Calculate simple interest and the final amount for a principal, rate and time.

Runs in your browser — files never leave your device

Final amount
$1,150
Interest
$150

How it works

This calculator applies simple interest: interest charged — or earned — only on the original principal, never on interest that has already accumulated. It fits short-term personal loans, lending between family or friends, bond coupon income, and any agreement that states a plain annual rate with no compounding.

The formula is interest = P × R × T ÷ 100, where P is the principal, R the annual rate in percent, and T the time in years; the final amount = P + interest. Growth is perfectly linear — the same dollar amount of interest accrues every year — which is exactly what separates it from compound interest, where the interest itself starts earning.

A fully worked example: $1,000 at 5% for 3 years gives interest = 1,000 × 5 × 3 ÷ 100 = $150 — that is $50 per year — and a final amount of $1,150. Time can be fractional: 9 months is 0.75 years, so $5,000 at 6% for 9 months earns 5,000 × 6 × 0.75 ÷ 100 = $225, for a final amount of $5,225.

When interpreting the result, remember that at the same rate simple interest always yields less than compound: the same $1,000 at 5% for 3 years compounded yearly grows to $1,157.63, and the gap widens with time and rate. Also note the formula assumes the entire principal stays outstanding for the whole period — if you repay a loan in monthly installments, the balance shrinks as you go and the true interest is well below P × R × T. For amortized loans, use the loan calculator instead.

Frequently asked questions

How is simple interest different from compound interest?
Simple interest is computed only on the original principal, so it grows in a straight line; compound interest is also earned on past interest, so it accelerates. On $1,000 at 5% for 3 years, simple interest gives $150 while yearly compounding gives $157.63 — and that gap keeps widening the longer the money sits.
How do I enter months or days instead of years?
Convert to years: divide months by 12 (9 months = 0.75) or days by 365. Because the formula is linear in time, partial years scale exactly — half the time means exactly half the interest.
Is the rate annual or monthly?
Annual. If your agreement states a monthly rate, multiply it by 12 first — 1% per month equals 12% per year under simple interest. That shortcut is only valid because there is no compounding.
Can I use this for a loan I repay in monthly installments?
Not directly. The formula assumes the full principal stays outstanding for the entire term, but with installments your balance falls every month, so the real interest is meaningfully less than P × R × T. Amortized loans belong in the loan calculator instead.
What products actually use simple interest?
Short-term personal loans, many U.S. auto loans (which accrue simple interest daily on the remaining balance), bond coupon payments, statutory or court-ordered interest, and informal IOUs between individuals. Check the contract wording — “interest computed on the unpaid principal without compounding” signals simple interest.
How are the results rounded?
The interest is computed exactly from the formula, then the interest and the final amount are each rounded to the nearest cent for display. There are no intermediate rounding steps to introduce drift.
Is my data uploaded?
No — it runs in your browser.

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