Calculate simple interest, where interest is earned only on the original principal.
Try an example
Load a ready-made sample into this tool and run it. Every result you see is calculated live by the tool itself — nothing here is a pre-written answer.
Sample: principal: 10000; rate: 5; years: 3
How to Use
- Enter the principal, annual rate and years.
- Click Run.
- Read the interest and the total amount.
What this simple interest calculator does
This simple interest calculator works out interest that is charged or earned only on the original principal — the starting amount never grows during the term. Enter the principal, the annual rate and the number of years, and it returns the interest and the total amount. It matches the structure of many short-term loans, straightforward deposits and textbook problems alike.
The formula
Simple interest is I = P × r × t: the principal times the annual rate, expressed as a decimal, times the number of years. The interest for each year is identical, because the base never changes. For example, at a 5% rate a principal earns one twentieth of itself every year, with no compounding added.
Good to know
Because interest is never added to the base, simple interest grows in a straight line, unlike compound interest, which curves upward over time. If a real product compounds — even once a year — this calculator will understate its growth, so check which type of interest applies before relying on the figure.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is always calculated on the original principal. Compound interest is calculated on principal plus interest already earned, so it grows faster. Over short periods the gap is small; over years, large.
How much interest does each year add?
Exactly the same amount: the principal multiplied by the annual rate. Two years double the one-year interest; three years triple it. That flat pattern is the defining feature of simple interest.
Where is simple interest used?
Some short-term loans, certain bonds and deposits, and most textbook problems, because it is easy to verify by hand. Many savings products use compound interest instead, so the product’s label decides.
How to use Simple Interest Calculator
- Enter the principal, annual rate and years.
- Click Run.
- Read the interest and the total amount.
Limitations
Simple interest never compounds; interest each year stays the same because it applies only to the principal.