Simple Interest Calculator
Enter the principal, the yearly interest rate and the number of years to see the interest earned or owed.
Updated
Report a problem
Formula
I = P × r × t and A = P + I
Pis the principalris the yearly rate as a decimal (rate % ÷ 100)tis the time in years
Worked example
5,000 at 4% a year for 3 years:
I = 5,000 × 0.04 × 3 =600A = 5,000 + 600 =5,600
Frequently asked questions
What is the simple interest formula?
I = P × r × t, where P is the principal, r the yearly rate as a decimal and t the time in years. For 5,000 at 4% for 3 years, I = 5,000 × 0.04 × 3 = 600.
How is simple interest different from compound interest?
Simple interest is always charged on the original principal. Compound interest is also charged on earlier interest. 5,000 at 4% for 3 years earns 600 simple interest but 624.32 compounded yearly.
How do I use a time in months or days?
Turn it into years first. Six months is 0.5 years and 90 days is about 0.25 years. 1,000 at 8% for 6 months earns 1,000 × 0.08 × 0.5 = 40.
What is the total amount?
It is the principal plus the interest: A = P + I. With 5,000 and 600 of interest, the total is 5,600.