Calculate simple interest (I = P × r × t) on a loan or investment — the interest earned, the total amount, and a clear principal-vs-interest breakdown. Free, instant, works on any device.
I = P × r × t
Simple interest is calculated only on the original principal — never on previously earned interest. The formula is I = P × r × t, where P is the principal, r is the annual rate (as a decimal), and t is the time in years. For example, $10,000 at 5% for 3 years earns 10,000 × 0.05 × 3 = $1,500 in interest, for a total of $11,500. Unlike compound interest, the interest each year stays the same because it's always based on the starting amount.
Simple interest is common in short-term loans, car loans, some personal loans, and many bonds and certificates. It's almost always better for a borrower (you pay less than with compounding) and worse for a saver (you earn less than compounding). When comparing offers, check whether the rate is simple or compound — over long periods the difference is large.
Interest = Principal × Rate × Time. Total = Principal + Interest. Time must be in years (6 months = 0.5, 90 days ≈ 0.2466).
Simple interest is flat each period. Compound interest grows because it earns interest on interest — so compound always exceeds simple over time at the same rate.
Auto loans, short-term personal loans, Treasury bills, and many bonds use simple interest. Savings accounts and credit cards use compound interest.
This tool converts months and days to years for you (months ÷ 12, days ÷ 365), so you can enter the period in whatever unit your loan uses.