qcalculator.net

Simple Interest Calculator

Calculate simple interest — interest charged only on the original principal, not on accumulated interest. Enter your amount, annual rate and time to see the interest and the final total.

Details

Total amount
$12,500.00
Principal
Interest earned
Advertisement

How it works

Simple interest is a flat percentage of the original principal for each year:

I = P × r × t

The total amount due is simply A = P + I. Unlike compound interest, the interest never earns interest of its own.

Worked example

$10,000 at 5% simple interest for 5 years:

Frequently asked questions

What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus all previously earned interest, so it grows faster over time. Most savings accounts and loans use compound interest; some short-term loans and bonds use simple interest.
When is simple interest used?
It's common on car loans, some personal loans, short-term and bridge loans, and certain bonds and certificates. It's also used as a teaching baseline because the math is straightforward.
How do I convert the rate to a decimal?
Divide the percentage by 100. A 5% rate becomes 0.05 in the formula. This calculator does that step for you — just enter 5.

Related calculators