Simple Interest Calculator
Calculate simple interest and the ending balance from a principal, fixed annual rate, and time in years.
Content updated July 31, 2026
Uses I = P × r × t. Interest never earns interest, the annual rate stays fixed, and results are displayed to the currency's usual precision.
Simple interest grows in a straight line: the interest is always calculated from the original principal, never from interest already earned. Enter a principal, annual rate, and time to see both the interest and the ending amount.
This is useful for classroom problems and products explicitly quoted on a simple-interest basis. Most savings accounts and many real loans use compounding or balance-based interest instead, so check the agreement before relying on the result.
The Simple Interest formula
I = P × r × t; Total = P + II = simple interest · P = original principal · r = annual rate as a decimal · t = time in years.
Worked example
For $10,000 at 5% a year for 3 years: I = 10,000 × 0.05 × 3 = $1,500, so the total is $11,500.
Assumptions, rounding, and limitations
Assumptions
- The annual rate stays fixed.
- Interest is calculated only on the original principal.
- Time is entered in years; partial years may be decimal values.
Rounding: Calculations retain full precision; displayed money is rounded by the selected currency formatter.
Limitations
- Does not model compounding, payments, fees, taxes, day-count conventions, or a changing principal.
- A real financial agreement can use a different interest method.
Sources
- Calculating loan payments — simple interest formula — U.S. Consumer Financial Protection Bureau
How simple interest works
Multiply the principal by the annual rate as a decimal and by the time in years. A $10,000 principal at 5% for three years earns $10,000 × 0.05 × 3 = $1,500.
The same amount is added each year because the principal does not change. That is the key difference from compound interest, where earlier interest also starts earning interest.
Frequently asked questions
▶What is the simple interest formula?
I = P × r × t, where P is principal, r is the annual rate as a decimal, and t is time in years. Add I to P for the total amount.
▶Does simple interest compound?
No. Interest is calculated only on the original principal, so the amount added in each equal time period stays constant.
▶How do I use months in the formula?
Convert months to years by dividing by 12. For nine months, use 9 ÷ 12 = 0.75 years.
▶Will this match my loan statement?
Only if the product uses this exact simple-interest model. Many loans calculate interest on a changing daily or monthly balance and include payment timing or fees.
Related calculators
See how a lump sum plus optional regular deposits grows over time with compound interest.
Open calculator →Convert a nominal annual interest rate into APY and estimate one year of compounded interest.
Open calculator →Discount one future lump sum to its value today using a fixed annual rate, time, and compounding frequency.
Open calculator →Disclaimer: Simple Interest Calculator results are estimates for general information and education only, and are not financial, tax, legal or medical advice. Verify important decisions with a qualified professional.