Simple interest calculator

Simple vs compound interest

Simple interest is paid only on the original amount: borrow $10,000 at 5% a year and you owe $500 of interest each year, no matter how long. Compound interest also charges interest on past interest, so it grows faster. Simple interest is used for short loans, car title loans in some states, accrued interest on bonds between coupon dates, and many late-payment charges.

Formula

I = P × r × t, where P is the principal, r the annual rate as a decimal and t the time in years. For months, divide by 12; for days, divide by 365.

Worked examples

$10,000 at 5% for 3 years: 10,000 × 0.05 × 3 = $1,500, for a total of $11,500.

$2,000 at 6% for 18 months: 2,000 × 0.06 × 1.5 = $180.

$1,000 at 7.3% for 90 days: 1,000 × 0.073 × 90/365 = $18.

The page converts the time to years (months ÷ 12, days ÷ 365), multiplies principal × annual rate × years for the interest, and adds the principal for the total. Interest never compounds. For periods in days, some markets divide by 360 instead of 365; this page uses 365. Everything runs in your browser.