Simple Interest Calculator
Free simple interest calculator: the interest and total on a principal at a fixed annual rate over time, using I = P × r × t. Runs in your browser.
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Simple interest is I = P × r × t — interest is charged only on the original principal, never on interest already added. That’s the difference from compound interest, which grows faster because it earns on interest too. Runs in your browser.
This simple interest calculator works out the interest and the final total on a principal held at a fixed annual rate for a number of years, using the standard formula I = P × r × t — principal times rate times time. Enter the three values and it returns the interest earned (or owed) and the total.
Simple interest is charged only on the original principal, never on interest that has already accrued. That is the crucial difference from compound interest, where each period's interest is added to the balance and then itself earns interest. Over one year the two are identical; over many years compound pulls ahead, sometimes dramatically. Simple interest is what you meet on many car loans, some personal and student loans, bonds and short-term promissory notes, so it is the right model when the agreement says the interest does not compound.
A worked example: €1,000 at 5% for 3 years is €1,000 × 0.05 × 3 = €150 of interest, for a €1,150 total. Use it to check a loan quote, a bond coupon or a back-of-envelope estimate. Everything is computed in your browser and nothing you type is uploaded.
Frequently asked questions
What is the simple interest formula?
I = P × r × t: interest equals the principal times the annual rate (as a decimal) times the time in years. The total you repay or receive is the principal plus that interest. This calculator applies it for you.
How is simple interest different from compound interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus accumulated interest, so it grows faster over time. They match for the first year and diverge after that.
When is interest simple rather than compound?
Many car loans, some personal and student loans, most bonds and short-term notes use simple interest. Savings accounts, credit cards and mortgages generally compound. Check the agreement to know which applies.