Simple Interest Calculator
Interest on the original amount only — the maths behind most short loans and deposits, with the formula shown.
- Total at the end
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- Compound would give
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Fast, easy and free — your answer appears as you type, and whatever you enter stays on your device.
Principal, rate and time in — interest and total out, with the formula printed and, alongside it, what compound interest would have produced. The gap between those two numbers is the entire story of interest.
How to use it
- Enter the three inputsThe amount, the yearly rate, and the time in years — 18 months is 1.5.
- Read the interestThe headline is the interest alone; the total adds it to the principal.
- Compare with compoundThe side figure shows the same money compounding yearly — the difference grows with time.
The straight line of interest
Simple interest is interest that never meets itself: it is always calculated on the original principal, so every year adds the same amount. Borrow 1,000 at 5% and the cost is 50 a year, flatly, forever. That linearity makes it the easiest interest to reason about — and the reason it survives in short-term lending, where the simplicity is worth more than the precision.
Why the compound figure sits beside it
The most useful thing a simple interest calculator can do is show what it is not. The side-by-side compound figure uses the same principal, rate and time with yearly compounding, and the gap between the two answers is the compounding effect isolated — negligible at one year, decisive at thirty. If you are deciding where the distinction matters for you: money you hold long-term compounds; money you borrow short-term mostly does not. When the compound figure startles you, the compound interest calculator next door breaks it down year by year.
Everything stays on your device, and nothing you type becomes a marketing lead.
Questions people ask
What is the simple interest formula?
Interest = principal × rate × time, with the rate as a fraction. 1,000 at 5% for 3 years: 1000 × 0.05 × 3 = 150. The tool prints this line with your numbers in it.
Where is simple interest actually used?
Short-term lending mostly: many personal and car loans accrue interest daily on the outstanding balance in a simple-interest way, plus bonds' coupon payments, some deposit accounts, and late-payment penalties. Long-term savings and mortgages are compound territory.
How different is it from compound interest?
Over short periods, barely — one year at 5% is identical. Over long ones, dramatically: 1,000 at 5% simple for 30 years earns 1,500; compounded yearly it earns 3,322. Simple interest grows in a straight line, compound in a curve, and the side-by-side figure on this page shows the gap for your exact numbers.
How do I enter months instead of years?
Divide by 12: six months is 0.5, eighteen months is 1.5. The formula treats time as a plain multiplier, so fractions work exactly.
Is this the same as APR?
No. APR includes fees and reflects compounding where it happens, which is why it exists — headline simple rates understate true cost. Use this tool to understand the mechanics; compare real loan offers by APR.
Are my figures stored?
No — the arithmetic runs on your device and nothing is kept.