Simple Interest Calculator
Calculate simple interest with the classic I = P × r × t formula. Enter a principal, an annual rate, and a time period to see the interest earned and total balance.
Inputs
How to use this calculator
1. Enter the principal
The principal is the original sum — the amount you've deposited, lent, or borrowed before any interest is applied.
2. Set the annual rate
Use the simple annual interest rate as a percentage (e.g., enter 5 for 5%). For loans, this is the rate before any compounding or fees.
3. Choose the time period
Toggle between years, months, or days. The calculator converts everything to fractional years before applying the formula.
Simple vs. compound
Simple interest is calculated only on the original principal. Compound interest re-applies the rate to the running balance, so it grows faster. Use the Compound Interest calculator when interest is reinvested.
About simple interest
The formula
I = P × r × t. Interest equals principal times annual rate (as a decimal) times time in years. Total amount A = P + I = P × (1 + r × t).
Where you see it
Many short-term loans, certain bonds, and some auto loans use simple interest. Savings accounts almost always compound (so the simple formula understates the real return).
Time conversions
This tool uses 365 days per year for day-based inputs. Some financial contracts use 360 days ("banker's year") — if your contract specifies that, multiply the days-based result by 365/360 to match.