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Simple Interest Calculator

Calculate interest earned and final amount with the formula I = P × r × t in seconds.

How it is calculated

The tool computes I = P × r × t, where P is the principal (money), r is the annual rate written as a decimal (the percent you enter divided by 100) and t is the time in years. The final amount is P + I. Because interest is charged only on the original principal, it grows by the same amount every year.

The principal and the years must be greater than zero and the rate cannot be negative; otherwise no result is shown. Time must be entered in years, so express months as a fraction (9 months = 0.75).

Worked example

Principal 5000, rate 6 %, 3 years. The rate becomes 0.06. Interest = 5000 × 0.06 × 3 = 900. Final amount = 5000 + 900. The tool shows principal $5,000.00, interest $900.00 and a final amount of $5,900.00.

Try this example →

Common mistakes

  • Typing the rate as 0.06 instead of 6: the field expects a percent, so you would get a tiny interest.
  • Entering months as years (18 instead of 1.5), which multiplies the interest many times over.
  • Using the result for a deposit that compounds monthly or yearly; simple interest will understate what such an account pays.
  • Entering a monthly rate in a field that expects an annual rate.

Sources

About this calculator

This calculator applies the simple interest formula I = P × r × t, where interest accrues only on the original principal for the entire term rather than compounding on previously earned interest. That makes it different from a savings account or loan that compounds monthly or annually — the interest amount grows in a straight line year after year instead of accelerating.

Simple interest shows up in short-term lending and lending-adjacent contexts: promissory notes, short-term personal loans between individuals, certain bonds and treasury bills, and some auto loans that use the simple-interest method to spread charges evenly across the loan term. It's also the formula taught first in finance and math classes because it's the building block for understanding compound interest.

Lenders, borrowers drafting a private loan agreement, and students checking textbook problems all reach for this calculator because it turns principal, rate and time into an exact interest figure and payoff amount without needing a spreadsheet.

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Comments (1)

  • Editorial team

    Simple interest never adds interest to interest, which is why it suits short fixed-term loans or notes and understates what a typical savings account earns over many years. The time is in years, so six months is 0.5 and nine months is 0.75. If a lender quotes you a rate and you suspect it compounds, this figure will come out lower than the real cost. What kind of loan or deposit are you checking?

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