Simple Interest Calculator
Interest on the principal only — interest, total and per-period amounts.
Simple interest stays on the original principal. For interest-on-interest, use the compound interest calculator. General information, not financial advice.
Interest on the principal alone
Simple interest is the most straightforward kind: it is charged only on the original amount, never on the interest already added. That makes each period’s interest identical and easy to predict.
interest = principal × rate × time
With the rate as a decimal and time in years, the total is simply the principal plus that interest. Because nothing compounds, a longer term adds interest in a straight line rather than a curve.
$1,000 at 5% simple interest for 3 years earns $150 in interest — $50 each year — for a total of $1,150. The interest never changes because it is always based on the original $1,000.
Simple versus compound
Over short periods the two are close, but as time passes compound interest pulls ahead because it earns interest on interest. Knowing which one applies to a loan or account helps you compare offers honestly and avoid surprises.
Worth remembering
- Flat, not curved. Simple interest grows in a straight line.
- Time in years. Convert months to a fraction of a year.
- Check which applies. Loans and accounts may use either.
This is general information, not financial advice.