Enter a principal, annual rate and time to find the simple interest earned and the final balance.
How simple interest is worked out
Simple interest is calculated only on the original principal, not on accumulated interest. Enter the amount, the annual rate and the number of years and this calculator returns the interest and the total.
It’s the model used for many short-term loans and some bonds; for savings that compound, use the compound interest calculator instead.
Step by step
- Enter the principal amount.
- Enter the annual interest rate and the time in years.
- Read the interest and the final balance.
The maths behind it
interest = principal × rate% × time ÷ 100
final balance = principal + interest
Worked example
Worked through, a principal of 10,000 produces a interest earned of $1,500. Underneath, Interest comes out at $1,500 and Final balance at $11,500. Change any field and every figure updates as you type.
Frequently asked questions
What is simple interest?
Interest charged only on the original principal, so it grows in a straight line rather than accelerating like compound interest.
How is simple interest different from compound?
Simple interest ignores previously earned interest; compound interest adds it back so you earn interest on interest.
When is simple interest used?
Often for short-term or car loans and some fixed-income products. Always check which method your lender or bank uses.