Free tool · Finance
Simple Interest Calculator
See the interest earned, the total amount and the per-year interest for any starting amount, rate and time — in years, months or days.
Total amount on $10,000 at 5% for 3 years?
Simple interest adds $1,500.00 over 3 years — a flat $500.00 every year.
- I = 10,000 × 0.05 × 3 = $1,500.00 of interest.
- Total = 10,000 + 1,500.00 = $11,500.00.
How to use this simple interest calculator
- Enter the starting amount and the annual interest rate.
- Enter the time, and say whether it is measured in years, months or days.
- Read the large figure: the total amount, with the interest earned alongside.
What simple interest is
Simple interest is interest paid only on the original amount, never on interest already earned. Each period adds the same sum, so the balance grows in a straight line: $10,000 at 5% for three years earns $500.00 every year, $1,500.00 in total. Nothing accelerates and nothing is reinvested.
It is the usual method for short-term loans, many car loans and any deal where interest is quoted flat rather than compounded. It is also the fastest way to check a lender's headline figure — and to see the gap compounding makes: the same $10,000 at 5% over three years earns $1,614.72 compounded monthly, $114.72 more than the simple figure.
Reading the growth chart
The chart under the result draws your balance across the whole term. The blue line is the simple interest growth this calculator works out — a straight line, because interest is earned only on the starting amount. The orange line shows the same amount, at the same rate, compounding monthly instead, so the gap between the two lines is what compounding would add over the same period. The dashed line marks your starting amount, so everything above it is interest. Move your mouse over the chart, or touch it, to read the exact balance for both methods at any point along the way.
The formulas
Interest earned
I = P × r × t
P is the starting amount, r the annual rate as a decimal (5% is 0.05), and t the time in years — months and days are converted first. Multiply the three together: at the default of $10,000 at 5% for three years, the interest is $1,500.00.
Total amount
A = P × (1 + r × t)
The principal plus everything it earned, with no compounding added — the same as A = P + I. On the default figures the total amount is $11,500.00.
Finding the rate
r = I ÷ (P × t)
If you know the interest, the principal and the time, work backwards to the annual rate: $1,500 ÷ ($10,000 × 3) = 0.05, a 5% rate. It is the honest way to compare two offers that quote interest in different formats.
Examples
| Example | Principal | Rate | Time | Interest | Total |
|---|---|---|---|---|---|
| Short loan | $1,000 | 4% | 2 years | $80.00 | $1,080.00 |
| Deposit | $10,000 | 5% | 3 years | $1,500.00 | $11,500.00 |
| Loan over 18 months | $5,000 | 6% | 18 months | $450.00 | $5,450.00 |
| Six-month loan | $2,500 | 4% | 6 months | $50.00 | $2,550.00 |
Three mistakes people make with simple interest
Entering months as if they were years
A term of 18 months is 1.5 years, not 18. At 6% on $5,000, the correct figure is $450.00 of interest and a $5,450.00 total; treating the term as 18 years would multiply the answer twelve times over. The unit pills next to the time box do the conversion for you.
Typing the percent as a whole number
The formula wants the rate as a decimal: 5% is 0.05, not 5. Using 5 inflates the answer a hundredfold. (This calculator takes the percent as you type it and converts it for you.)
Confusing the total amount with the interest
They are different figures: on the default, the interest is $1,500.00 while the total amount is $11,500.00. Budgeting with the wrong one — expecting the total when a quote states interest only — throws off every plan built on it.
Frequently asked questions
What is simple interest?
Interest paid only on the original principal, never on interest already earned. Each period adds the same amount, so the balance grows by a constant dollar figure rather than accelerating.
How do I calculate simple interest?
Multiply the principal by the annual rate as a decimal by the time in years. On $1,000 at 4% for two years, that is 1,000 × 0.04 × 2 = $80.00 of interest and a total of $1,080.00.
What is the difference between simple and compound interest?
Simple interest never earns interest on itself; compound interest does. On $10,000 at 5% for three years, simple interest gives $1,500.00, while monthly compounding gives $1,614.72.
How do I enter months or days?
Convert to years before calculating: 18 months is 1.5 years, and 6 months is 0.5 years. The time field on this page accepts years, months or days and converts for you, so the rate always matches the time unit.
Can I work out the rate or the time instead?
Yes. Rearranging I = P × r × t gives r = I ÷ (P × t) for the rate and t = I ÷ (P × r) for the time, which is useful when a lender quotes interest but not a rate.
Does this calculator give financial advice?
No. It performs the arithmetic for the numbers you supply. It does not recommend rates, products or decisions, and a real agreement may add fees, taxes or penalties that are not part of this calculation.
Privacy and important information
This calculator runs entirely in your browser: your numbers are never sent to a server, stored, or shared. It is a calculation aid, not financial advice — always check a real loan or account against its own terms, including fees.
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