How to use the Simple Interest Calculator
- Enter the principal (the original amount).
- Enter the yearly interest rate.
- Enter the time and choose years, months or days.
- Read the interest and the total amount.
What does this tool do?
Simple interest is calculated on the original principal only. It doesn't compound, so the interest is the same every year. It's used for some short-term loans and deposits, bond coupon payments, and in school math.
Why use it?
- Quick answers for short-term loans and deposits.
- Shows the formula step by step for homework.
- Supports days for short periods.
Example
$5,000 at 6% simple interest for 3 years earns 5,000 × 6 × 3 ÷ 100 = $900. The total at the end is $5,900.
The formula
T is in years; months are divided by 12 and days by 365.
Privacy
The calculation happens instantly in your browser. The numbers you enter are not sent to our servers or saved. There's no account to create and nothing to install.
Frequently asked questions
How is simple interest different from compound interest?
Simple interest is always calculated on the original amount. Compound interest is calculated on the growing balance, so it grows faster over time.
How do I calculate simple interest for months or days?
Convert the time into years: divide months by 12 and days by 365. Interest on $5,000 at 6% for 9 months is 5,000 × 0.06 × 0.75 = $225. Some lenders divide days by 360 instead, which slightly increases the interest.
Last reviewed by the M2Toolkit team.