How to use the simple interest calculator
Enter the principal (the amount you lend, borrow or deposit), the annual interest rate and the length of time. Time can be given in years, months or days; choose the unit from the list next to the time field. Press Calculate to see the interest earned or owed and the total amount at the end.
When the time is one year or longer, a yearly breakdown table shows the interest for each year, the running total of interest and the balance. If the time ends part-way through a year, the last row covers just that partial year.
The simple interest formula
Simple interest is charged only on the original principal, never on interest already earned:
I = P × r × t
- I is the interest
- P is the principal
- r is the annual rate as a decimal (5% = 0.05)
- t is the time in years
The total amount is A = P + I. Months are converted as months ÷ 12 and days as days ÷ 365, so the calculator uses a 365-day year.
Worked examples
- 10,000 at 5% for 3 years: 10,000 × 0.05 × 3 = 1,500 of interest, so the total is 11,500. The interest is 500 every year.
- 10,000 at 5% for 30 months: t = 30 ÷ 12 = 2.5 years, giving 1,250 of interest and a total of 11,250.
- 10,000 at 5% for 90 days: t = 90 ÷ 365, giving about 123.29 of interest and a total of 10,123.29.
Simple versus compound interest
With compound interest, the interest is added to the balance and earns interest itself, so the balance grows faster each year. With simple interest the yearly interest stays the same. Simple interest is common for short-term loans, some car loans, treasury bills and certificates, and for quick estimates.
Good to know
- Some lenders use a 360-day year for day counts, which gives slightly more interest than the 365-day year used here.
- Amounts are rounded to cents for display. Results are estimates; your agreement sets the exact terms.
- The calculator accepts times of up to 100 years.