maratoolSimple Interest Calculator
Interest charged only on the principal: I = P·r·t. Enter amount, rate, and time to see interest, total, and how it compares to compounding.
What is Simple Interest?
The Simple Interest Calculator applies the I = P·r·t formula: interest is charged only on the original principal, never on accumulated interest. Enter any principal, annual rate, and time period — in years, months, or days — and it returns the interest owed, the total repayment, and what the same rate would produce with annual compounding, so you can see exactly what the "simple" part is worth.
How to use
- Enter the principal amount you are borrowing or lending.
- Set the annual interest rate as a percentage.
- Pick the time period in years, months, or days — interest and total update instantly.
Frequently asked questions
What is the simple interest formula?
I = P × r × t: interest equals principal times the annual rate times time in years. A $1,000 loan at 5% for 3 years earns $150 in interest.
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal. Compound interest is charged on principal plus accumulated interest, so it grows faster over time. The third result card shows the same rate compounded annually for comparison.
How do I calculate simple interest for months or days?
Convert to years first: divide months by 12 or days by 365. This calculator does the conversion when you pick the time unit.
Where is simple interest actually used?
Car loans, short-term personal loans, treasury bills, and most late-payment penalties use simple interest. Savings accounts and mortgages compound instead.
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