Simple Interest Calculator
Calculate simple interest and the final amount, or work backwards to find the principal, rate or time, using I = P × r × t
Last updated: November 3, 2026
How to Use the Simple Interest Calculator
How to calculate simple interest
- Choose what you want to find. The default is the interest and the total amount, but you can also solve for the principal, the rate or the time.
- Enter the principal (the starting amount) and the annual interest rate.
- Enter the time and pick whether it is in years, months or days.
- Read the result. You get the interest, the total amount you will owe or receive, and a year-by-year table.
To work backwards, switch the first option. For example, choose Interest rate and enter the principal, the time and the interest you paid, and the calculator returns the annual rate.
The rate is always an annual percentage. If your loan quotes a monthly rate, multiply it by 12 first.
Formula & Methodology
Simple interest formula
I = P × r × t
- I = the interest
- P = the principal, the amount you start with
- r = the annual interest rate as a decimal (5% = 0.05)
- t = the time in years
The total amount at the end is A = P + I = P × (1 + r × t).
Because the interest is only ever charged on the original principal, the same amount is added every year.
Rearranging the formula
| To find | Formula | |---|---| | Interest | I = P × r × t | | Principal | P = I ÷ (r × t) | | Rate | r = I ÷ (P × t) | | Time | t = I ÷ (P × r) |
Worked examples
Interest on $10,000 at 5% for 3 years
- I = 10,000 × 0.05 × 3 = $1,500
- Total amount = 10,000 + 1,500 = $11,500
Using months or days. Convert the time to years first. For $5,000 at 12% for 6 months, t = 6 ÷ 12 = 0.5, so I = 5,000 × 0.12 × 0.5 = $300. For $1,000 at 6% for 90 days, t = 90 ÷ 365, so I = 1,000 × 0.06 × (90 ÷ 365) = $14.79.
Simple interest vs compound interest
| | Simple interest | Compound interest | |---|---|---| | Interest is charged on | The original principal only | The principal plus past interest | | Growth | Straight line | Accelerating | | $10,000 at 5% after 10 years | $15,000 | $16,470 (compounded monthly) | | Typical use | Short-term loans, car loans, some bonds | Savings accounts, investments, credit cards |
For anything where interest earns interest, use the compound interest calculator.
About Simple Interest Calculator
Our simple interest calculator is a free, easy-to-use tool designed to help you calculate simple interest and the final amount, or work backwards to find the principal, rate or time, using i = p × r × t. For professionals or those who need quick calculations, our calculator provides accurate results instantly.
Frequently Asked Questions
How do you calculate simple interest?
Multiply the principal by the annual interest rate (as a decimal) and by the time in years: I = P × r × t. For $10,000 at 5% for 3 years, the interest is 10,000 × 0.05 × 3 = $1,500, so the total is $11,500.
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal, so it grows by the same amount each year. Compound interest is charged on the principal and on the interest already added, so it grows faster over time. $10,000 at 5% for 10 years earns $5,000 in simple interest but about $6,470 when compounded monthly.
How do I calculate simple interest for months or days?
Convert the time to years before using the formula: divide months by 12 or days by 365. Six months is 0.5 years, and 90 days is about 0.2466 years. The calculator does this when you choose months or days as the unit.
How do I find the principal, rate or time?
Rearrange I = P × r × t. The principal is I ÷ (r × t), the rate is I ÷ (P × t) and the time is I ÷ (P × r). Choose the value you need in the first option and enter the other three.
Do I use the rate as a percentage or a decimal?
The formula needs a decimal (5% = 0.05), but you can type the percentage into the calculator and it converts it for you. Some textbooks write the formula as I = P × R × T ÷ 100, which uses the percentage directly.
Where is simple interest used in real life?
It is common on short-term personal loans, many auto loans, some bonds and treasury bills, and in basic bank problems. Savings accounts and credit cards usually use compound interest instead, so check the terms of your own account.
Is the total interest the same each year?
Yes. With simple interest the yearly amount is always principal × rate, so $10,000 at 5% earns $500 every year. The table shows the interest earned each year and the running total.
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