Savings & Interest
Simple Interest Calculator
Calculate simple interest on any principal using I = PRT — enter the amount, annual rate, and time period in years, months, or days.
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
Simple Interest (I) = P × R × T
Total Amount (A) = P + I = P × (1 + R × T)
Where P = Principal, R = Annual Rate (decimal), T = Time in years
Time conversions: months → divide by 12 · days → divide by 365
Example: $10,000 at 5% for 3 years → I = $10,000 × 0.05 × 3 = $1,500 · Total = $11,500
Frequently Asked Questions
- Simple interest accrues only on the original principal — the interest never earns additional interest. Compound interest earns interest on both principal and accumulated interest, growing exponentially. For the same principal and rate, compound interest always produces a higher total.
- Short-term personal loans, some auto loans, US Treasury Bills, certain savings bonds, and some mortgages (especially simple-interest mortgages). It's most common for short durations where compounding has minimal practical effect.
- A mortgage where interest accrues daily on the remaining principal balance rather than being calculated monthly. If you pay early in the month, less interest accrues; if you pay late, more accrues. Paying consistently on time or early saves money.
- Use T = number of days ÷ 365 in the formula. For a $5,000 loan at 8% APR over 90 days: I = $5,000 × 0.08 × (90/365) = $98.63.
- With compound interest, each interest payment is added to the principal, so future interest is calculated on a larger base. Over decades, this snowball effect creates a huge difference. A $10,000 at 5% for 30 years: simple = $15,000; compound monthly = $44,677.