Simple Interest Calculator
Simple interest: I = P × R × T
This free Simple Interest Calculator uses the classic classroom formula — interest equals principal times rate times time — to show exactly what a loan or deposit earns or costs when interest is charged only on the original amount. Enter the principal, the yearly rate and the time in years or months, and you get the interest, the final total, and a year-by-year table showing the balance growing in a perfectly straight line. Simple interest still appears in real life on things like short-term loans, some bonds, late-payment charges and many school and exam questions.
The straight line is the whole point, and it is also the key contrast with compound interest. Because interest here never earns interest on itself, growth is steady and predictable: the same amount is added in year five as in year one. That makes simple interest kinder on loans and less rewarding on savings than compounding over long periods, and the table makes the difference easy to see when you compare the two calculators. Students can also use the table to check each step of a worked example from a textbook. Everything is computed locally in your browser, and nothing you enter is uploaded or saved.
How to use
- Enter the principal: the amount borrowed or invested.
- Type the yearly interest rate as a percentage.
- Enter the time and choose years or months.
- Click Calculate interest to see the interest and total.
- Read the table to watch the balance grow year by year.
Frequently asked questions
What is the simple interest formula?
Interest equals P times R times T: the principal multiplied by the rate as a decimal, multiplied by the time in years. Ten thousand at five percent for three years earns ten thousand times zero point zero five times three, which is fifteen hundred.
How do I enter months instead of years?
Choose Months next to the time box and type the number of months. The calculator converts them into years for the formula, since twelve months is one year, a period of eighteen months counts as one and a half years.
When is simple interest actually used?
Short-term personal loans, car loans in some regions, certain government bonds and penalty charges often use it, and it is the standard first topic in school finance maths. Most savings accounts and credit cards, by contrast, use compound interest.
Why does the table show the principal staying the same?
That is the definition of simple interest: interest is always calculated on the original principal only, never on interest already earned. The principal column is constant, the interest column grows by the same amount each year, and the balance is simply the two added together.