Simple Interest Calculator

Calculate simple interest, total interest earned, and the final amount from principal, rate, and time.

Finance Direct route, no hidden menu

Output

Result

Step 2

Total amount

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Interest earned

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Original principal

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How It Works

The calculator converts your time period to years automatically. It then multiplies Principal × Annual Rate × Time (in years) to find the total interest. Finally, it adds interest to the original principal to show the total amount you will have or owe.

Example

If you borrow $10,000 at a 5% simple annual interest rate for 3 years, the interest is $10,000 × 0.05 × 3 = $1,500. The total amount to repay is $11,500.

Inputs explained

Principal: the original amount of money, before interest.
Annual rate: the yearly interest rate as a percentage.
Time: the length of the investment or loan.
Time unit: choose Years, Months, or Days — the calculator normalises to years automatically.
Currency display: changes formatting only; the calculator does not convert exchange rates.

Simple vs. compound interest

Simple interest = Principal × Rate × Time (interest never compounds).
Compound interest = Principal × (1 + Rate)^Time (interest earns interest).
Short-term or simple loans: simple interest is common.
Long-term savings and investments: compound interest is the norm.

Frequently Asked Questions

What is the simple interest formula?

Simple interest is calculated as Principal × Annual Rate × Time (in years). It does not add interest back into the principal — only the original amount earns interest.

How is this different from compound interest?

Compound interest earns interest on previous interest accumulated. Simple interest only earns interest on the original principal amount.

Can I calculate daily or monthly interest?

Yes. Select Days or Months from the Time Unit dropdown and the calculator converts the time period to the correct fraction of a year for accurate results.

Is this calculator suitable for loan or savings decisions?

It gives a good estimate for short-term, simple-interest loans or savings. For long-term financial decisions, consider compound interest. Always verify with a financial advisor.