Simple Interest Calculator

Enter a principal, an annual interest rate, and a time period to find interest that accrues only on the original amount — updates instantly as you type.

Enter a principal, rate, and time period above to calculate the interest and total.

Simple interest earned on $10,000

Interest only, not the total balance — add the principal back to get the payoff amount at that point.

Annual rate1 year5 years10 years
2%$200.00$1,000.00$2,000.00
3%$300.00$1,500.00$3,000.00
4%$400.00$2,000.00$4,000.00
5%$500.00$2,500.00$5,000.00
6%$600.00$3,000.00$6,000.00
7%$700.00$3,500.00$7,000.00
8%$800.00$4,000.00$8,000.00
10%$1,000.00$5,000.00$10,000.00

How is simple interest calculated?

Simple interest accrues only on the original principal — never on interest that has already been added — so it grows by the same dollar amount every period:

I=P×r×t

Where I is the interest, P is the principal, r is the annual interest rate as a decimal, and t is the time in years. The total payoff or final balance is the principal plus that interest: total=P+I.

Example: $1,000 at 5% annual interest for 3 years

I = 1000 × 0.05 × 3 = $150.00, for a total of 1000 + $150.00 = $1,150.00.

Example: $5,000 at 8% annual interest for 18 months

Convert months to years first — 18 ÷ 12 = 1.5 years — then apply the same formula: 5000 × 0.08 × 1.5 = $600.00 interest, for a total of $5,600.00.

Frequently asked questions

How is simple interest different from compound interest?
Simple interest is calculated only on the original principal, so the dollar amount stays the same every period. Compound interest is calculated on the principal plus any interest already added, so the dollar amount grows over time. Over long spans the gap is large: the same $1,000 at 5% for 30 years earns $1,500.00 of simple interest, versus roughly $3,467.74 if compounded monthly instead.
Where is simple interest actually used?
Some short-term and personal loans, certain auto loans, and instruments like Treasury bills and simple-interest bonds use it, calculated only on the original principal for the life of the loan. Most savings accounts, credit cards, and mortgages use compound interest instead, so it's worth checking which one applies before comparing two offers by their rate alone.
Does this account for a 360-day or 365-day year?
No — this calculator applies the annual rate directly to the time you enter in years (or months, converted to years), the way simple interest is usually described. Some lenders use a 360-day-year convention for daily interest accrual, which produces slightly different results over exact day counts; check your loan's terms if you need an exact day-count match.
How do I calculate simple interest for a period in months?
Switch the time unit toggle above to "Months" and enter the number of months directly — the calculator converts it to years (months ÷ 12) automatically before applying the formula, so you don't have to do that conversion by hand.

Money growing faster than a flat rate over time? See the compound interest calculator or the simple vs compound interest comparison.