➗Simple Interest Calculator
Simple interest is charged only on the original amount. Enter a principal, rate and number of years to see the interest and total.
Last updated: · Reviewed by The CalcWise Team
Advertisement
Advertisement
How to use this calculator
- Enter the principal — the original amount borrowed or invested.
- Add the annual interest rate and the time in years.
- Calculate to see the simple interest and the total amount.
How it works
Simple interest uses the formula Interest = Principal × Rate × Time. Unlike compound interest, it is never charged on previously earned interest, which makes it easy to calculate and predict.
Simple interest appears in some short-term loans, car loans, and bonds. For savings and most long-term loans, compound interest applies instead — and the difference grows large over time.
Example: $10,000 at 5% simple interest for 3 years earns exactly $1,500 in interest, for a total of $11,500.
Frequently asked questions
When is simple interest used?
It is common in some auto loans, short-term personal loans, and certain bonds, where interest does not compound.
Is simple or compound interest better for me?
As a saver, you want compound interest. As a borrower, simple interest is usually cheaper because it does not charge interest on interest.