23 · Calculators

Simple Interest Calculator

Enter a principal, an annual interest rate and a length of time to see the interest earned or owed, with no compounding.

Interest

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How to use the simple interest calculator

  1. Enter the principal: the amount borrowed or saved.
  2. Enter the yearly interest rate.
  3. Enter the time and choose years, months or days.

The formula

Simple interest is I = P × R × T: principal times the annual rate (as a decimal) times the time in years. Months are divided by 12 and days by 365. Interest is only ever charged on the original principal, never on interest already added.

Simple vs. compound interest

With compound interest, each period’s interest is added to the balance and earns interest itself, so the total grows faster. Simple interest is used for some car loans, short-term loans and bonds. For savings that compound, use the compound interest calculator.

Examples

5,000 at 4% for 3 years

600.00 interest · 5,600.00 total

10,000 at 5% for 18 months

750.00 interest · 10,750.00 total

Questions

Does it use 360 or 365 days?

Days are converted with a 365-day year. Some banks use 360 days, which gives slightly more interest.

Can I use a monthly rate?

Enter the annual rate. To convert a monthly rate, multiply it by 12.

Is there a currency?

No. Results are in whatever currency you enter.