Simple Interest Calculator
Compute simple interest with I = P·r·t from the principal, the annual rate, and the time in years, then see the amount you would repay.
- Write the annual rate as a decimal: 5% = 0.05.
- I = P · r · t = $1,000.00 × 0.05 × 3 = $150.00.
- Amount = principal + interest = $1,000.00 + $150.00 = $1,150.00.
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All calculations run locally in your browser. Your entered values are not sent to an external service.
How to Use the Simple Interest Calculator
Enter the principal, the annual interest rate as a percent, and the time in years. Select Calculate Interest. The tool reports I = P·r·t, the amount P + I, a per-day interest figure, and the growth factor 1 + r·t.
- Enter the starting amount.
- Enter the annual rate. Use 0 for an interest-free period.
- Enter time in years — 0.5 for six months, 1/12 for one month — then calculate.
Simple interest is the classroom method: interest is charged only on the original principal. It is not the formula for a typical mortgage or auto loan, which amortize a monthly payment.
The Simple Interest Formula
P is the principal, r is the annual rate as a decimal (5% is 0.05), and t is time in years. The amount at the end of the term is A = P + I = P(1 + r t).
If the rate is zero, I is zero and the amount equals the principal. Time must be greater than zero so the product is defined as a genuine time period.
Simple Interest Examples
Three years on $1,000
I = 1000 × 0.05 × 3 = $150. The amount is $1,150. That is the default example on this page.
Eighteen months
Eighteen months is 1.5 years. On $5,000 at 8%, I = 5000 × 0.08 × 1.5 = $600, so the amount is $5,600.
One month
One month is 1/12 of a year. On $10,000 at 12%, I = 10000 × 0.12 × (1/12) = $100.
A 0% rate
On $2,000 at 0% for 2 years, I = $0.00 and the amount is still $2,000.
How This Differs from a Loan or Mortgage Payment
Amortized loans charge interest on the remaining balance each month and fold that cost into a fixed payment. Simple interest charges r only on the original P for the whole time t. The same $20,000 at 6% for 5 years is about $6,000 of simple interest, but only about $3,199 of interest on the Loan Calculator’s monthly-payment schedule, because the balance falls each month.
Use this page for I = Prt homework and short-term notes that are written that way. Use the Compound Interest Calculator when interest is added to the balance. Use the Loan, Mortgage, or Auto Loan calculators for a monthly payment.
Common Simple Interest Mistakes
Leaving the rate as a percent in the product
Convert 5% to 0.05 before multiplying. This calculator does that conversion for you.
Using months as if they were years
Six months is 0.5 years, not 6. Entering 6 would compute six years of interest.
Treating a mortgage as simple interest
Home and car loans almost always amortize. Use the Mortgage or Auto Loan calculator for those payments.
Adding interest to interest
Simple interest does not compound. Do not apply I = Prt again to P + I unless the problem says to.
A zero time period
Time must be greater than zero. A period of 0 years is not a loan term.
Simple Interest Calculator FAQs
What is the simple interest formula?
I = P · r · t, where r is the annual rate as a decimal and t is time in years.
How do I enter six months?
Enter 0.5 years.
Does this compound?
No. Interest is computed only on the original principal. Use the Compound Interest Calculator for A = P(1 + r/n)^(nt).
Can the rate be zero?
Yes. Then I = $0.00 and the amount equals the principal.
Is this the same as a monthly loan payment?
No. Use the Loan, Mortgage, or Auto Loan calculators for amortized payments.
Are my numbers sent to a server?
No. The calculation runs locally in your browser.
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Reviewed by Prof. Dr. Khalil Mudassar (PhD) · Last updated: [mc_modified_date]
Sources
Disclaimer
This calculator is for general educational use. It is not financial or lending advice. Confirm how a real note or account computes interest before you rely on the figure.