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Simple Interest Calculator
Interest is the price of money over time—earned on savings or paid on debt. This calculator works out simple interest, where interest is a fixed percentage of the original principal each year rather than compounding on top of itself. It is useful for short-term notes, certain bonds and educational comparisons. If you want interest that compounds — with optional recurring monthly deposits — use the Compound Interest Calculator instead.
Please enter valid, non-negative values.
Simple interest
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How to Use the Simple Interest Calculator
- Enter the principal amount, annual interest rate and time period in years.
- Select Calculate to see the simple interest earned and the total amount owed or earned.
- Change any input and recalculate to compare different rates or terms.
Choose a currency, then enter the principal, the yearly interest rate and the time in years. Use a decimal for part of a year, for example 0.5 for six months. The calculator shows the simple interest and the total amount. If you want interest that compounds, use the Compound Interest Calculator instead.
Simple Interest Calculator Formula Explained
Simple Interest = Principal × Rate × Time
Interest equals principal multiplied by the annual rate (as a decimal) multiplied by time in years. The final amount equals principal plus that interest. Unlike compound interest, simple interest is always calculated on the original principal only — it never earns interest on top of previously earned interest, so growth is linear rather than accelerating.
The calculator multiplies the principal by the rate (as a decimal) and by the time in years. The total amount is the principal plus that interest. Because interest is charged on the original principal only, doubling the time doubles the interest. The rate is the plain yearly rate, so if you only know a monthly rate, multiply it by 12 first.
Interest Calculator Example Calculation
€5,000 at 3% simple interest for 4 years earns €600. The same principal compounded annually at 3% finishes slightly higher because interest is earned on prior interest. Short consumer loans and educational examples still use simple interest; most savings products compound.
Worked example: enter 5,000 as the principal, 3 as the rate and 4 as the time. Simple interest is 5,000 × 0.03 × 4 = €600.00 and the total amount is €5,600.00. For 12,000 at 6.5% over 2.5 years, the interest is €1,950.00 and the total is €13,950.00.
When to use this tool
Use this for short-term loans, certain bonds, or teaching examples that quote simple interest.
Key Features & Benefits of This Simple Interest Calculator
- Simple, not compound, interest — interest is charged on the original principal only, so doubling the time doubles the interest.
- Interest and total amount — for example 5,000 at 3% for 4 years gives €600.00 interest and a €5,600.00 total.
- Part-year terms — use a decimal for part of a year, such as 0.5 for six months or 2.5 for two and a half years.
- Multiple currency choices — choose the display currency while keeping all inputs in the same unit.
- Instant, free and private — runs entirely in your browser, no sign-up, nothing stored.
Good to know
Some products quote nominal rates and others effective annual rates. Align the calculator inputs with the definition used in the product information sheet.
Simple Interest Calculator — FAQs
When is simple interest still used?
Some short-term personal loans, certain bonds and educational examples still quote simple interest. Most modern savings and mortgages use compounding instead.
Does this calculator handle compound interest?
No — this tool calculates simple interest only, based purely on the original principal. For interest that compounds over time, with optional monthly deposits, use the Compound Interest Calculator.
How do I convert a monthly rate to an annual rate?
For a simple (nominal) rate, multiply the monthly rate by 12. This differs from an effective annual rate, which accounts for compounding and applies to compound interest products instead.
Does this include fees or tax?
No. The result is pure interest math. Product fees and tax on interest income should be applied separately.
Sources and review
Sources last checked: . These sources give the background for this calculator. They are general information, not financial advice.
- MoneyHelper: Interest rates explained: what compound interest is, and that the interest you earn can change if rates change.
- CFPB: How does compound interest work?: a worked example you can compare with the figures from this calculator.
Simple interest for months and days
For a term in months, divide the month count by 12 before entering years. Six months is 0.5 years: 10,000 at a simple annual rate of 6% earns 300, giving a total of 10,300.
For a term in days, first identify the contract’s day-count convention. Using a 365-day basis, 90 days is 90 ÷ 365 years. A principal of 10,000 at 6% then earns about 147.95. A 360-day basis produces 150.00 instead. This tool does not choose a day-count convention for you.
A time period alone does not determine whether interest is simple or compound. Use the Compound Interest Calculator when interest is added to the balance and earns further interest.