Simple Interest Calculator
Calculate the interest on a loan or savings account that doesn't compound. Enter the principal, interest rate, and time period to find the total interest and final amount. Ideal for short-term loans or basic savings calculations.
Inputs
Enter the required values to calculate.
Result
The calculated result will appear here.
More Information
Understanding the Simple Interest Calculator
Simple interest is a straightforward method of calculating the interest charge on a loan or savings account. Unlike compound interest, it is calculated only on the original principal amount for the entire duration.
The Simple Interest Formula
The calculation follows a basic formula:
Interest = Principal × Rate × Time
- Principal (P): The initial amount of the loan or deposit.
- Rate (R): The annual interest rate, expressed as a decimal (e.g., 5% becomes 0.05).
- Time (T): The number of time periods (typically years) the money is borrowed or invested for.
Our calculator allows you to input the time period in years, months, or days, and it will automatically convert it to the correct annual equivalent for the formula.
Simple vs. Compound Interest
The key difference is that simple interest is always based on the original principal. In contrast, our Compound Interest Calculator shows how interest is calculated on the principal *and* on the accumulated interest from previous periods. For this reason, compound interest leads to much faster growth for long-term investments.