Simple Interest Calculator
Interest = P × R × T.
Inputs
$
%
Result
Interest$600.00
Total$5,600.00
About the Simple Interest Calculator
The Simple Interest Calculator computes interest earned on a fixed principal using the simple-interest formula — no compounding — which applies to some short-term loans, notes, and certain bonds.
Calculation method
Interest = Principal × Rate × Time. Final amount = Principal + Interest.
I = P × r × tHow to use this calculator
- Enter the principal amount.
- Enter the annual interest rate.
- Enter the time in years.
Example
$5,000 at 6% for 3 years earns $900 in simple interest, ending at $5,900.
Frequently asked questions
Where is simple interest used?
Some auto loans, short-term personal loans, promissory notes, and Treasury bills use simple interest. Most credit cards and mortgages use compound interest.
Is simple interest better for borrowers or lenders?
Better for borrowers on the same nominal rate, because interest does not accumulate on prior interest. Lenders make less on the same headline rate.
How does simple interest differ from compound?
Simple interest is linear; compound interest is exponential. Over long horizons, the gap between the two becomes very large.
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for decisions specific to your situation.