Simple Interest Calculator

Interest on the original principal only: I = P × r × t.

Simple Interest Calculator

Worked example result

Interest earned	$100.00
Total amount	$1,100.00

$1,000 at 5% simple interest for 2 years earns exactly $100.

Simple interest is calculated only on the original amount, never on interest already earned. It is used for many short-term loans, bonds between coupon dates, and quick estimates.

Enter the principal, annual rate and time to get the interest and the total amount.

The formula

I = P × r × t

Worked example

$1,000 at 5% simple interest for 2 years earns exactly $100.

The example is pre-loaded in the result panel — press Calculate with your own numbers to replace it.

Frequently asked questions

When is simple interest used?

Short-term personal loans, some auto loans, and interest on bonds between payment dates commonly use simple interest.

Why is compound interest higher?

Because compound interest also earns interest on past interest. Over 2 years at 5%, $1,000 earns $100 simple but $102.50 compounded yearly.

Category: Finance calculators

Simple Interest Calculator