Simple interest calculator
Work out simple interest on a loan, deposit or note where interest is not added back to the balance. Students and anyone checking a short-term loan or bond coupon can use it.
- Runs in your browser
- Free, no account needed
- Copy or download the result
Result
Example
Principal: 5000 Annual interest rate: 4 Time: 3 Time unit: Years Days per year (for days): 365 (actual/365)
Interest: $600.00 Total (principal + interest): $5,600.00 Time in years: 3 I = P x r x t = $5,000.00 x 4.00% x 3 years. Simple interest never earns interest on interest.
How to use the simple interest calculator
- Enter the Principal and the Annual interest rate.
- Enter the Time and choose a Time unit of years, months or days.
- If the unit is days, set Days per year (for days) to 365 or 360, then press Run.
- Press Copy result to keep the answer.
How it works
Interest = principal x annual rate x time in years. Months are divided by 12 and days by 365 or 360, the day count you choose.
The total is the principal plus the interest. Interest is never charged on earlier interest.
The rate must be 0% to 100%, and time is limited to 100 years, 1,200 months or 36,500 days. Negative values are rejected.
Everything runs in your browser. Your input is not uploaded or stored.
Questions and answers
What is the simple interest formula?
I = P x r x t, where P is the principal, r is the yearly rate as a decimal and t is the time in years. For $1,000 at 5% for 3 years, I = $150.
What is the difference between simple and compound interest?
Simple interest is figured on the original principal only. Compound interest is also charged on interest already earned, so it grows faster.
Why use a 360-day year?
Some banks and commercial loans count a year as 360 days, which gives slightly more interest for the same number of days. Pick the basis your agreement uses.