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Simple Interest Calculator

Calculate simple interest and total amount from the principal, annual interest rate and time period. Select years, months or days and get an instant step-by-step result.

Calculate Simple Interest

Day calculations use a 365-day year.

Result

Enter the principal, rate and time to calculate simple interest.

What Is a Simple Interest Calculator?

A simple interest calculator determines how much interest is earned or charged on an original sum of money. The original amount is called the principal. Unlike compound interest, simple interest is not calculated on previously accumulated interest.

This method is useful for quick loan estimates, short-term lending, savings calculations, classroom exercises and basic financial planning. Actual banks and lenders may use additional fees, different day-count conventions or compounding rules.

SI = P × R × T ÷ 100
  • SI: Simple interest
  • P: Original principal amount
  • R: Annual interest rate as a percentage
  • T: Time expressed in years

How to Calculate Simple Interest

1. Enter Principal

Enter the original amount borrowed, saved, lent or invested.

2. Add Annual Rate

Enter the yearly interest rate as a percentage, such as 5, 8 or 12.

3. Select Time

Enter the duration and choose years, months or days.

Simple Interest Calculation Example

Suppose you invest $10,000 at an annual simple interest rate of 8% for 2 years.

Interest: $10,000 × 8 × 2 ÷ 100 = $1,600

Total amount: $10,000 + $1,600 = $11,600

Simple Interest vs Compound Interest

Feature Simple Interest Compound Interest
Calculated on Original principal only Principal plus accumulated interest
Growth Linear Accelerates over time
Formula P × R × T ÷ 100 Depends on compounding frequency
Common use Basic and short-term estimates Long-term savings and investments

Simple Interest FAQs

What is simple interest?
Simple interest is calculated only on the original principal amount. Interest is not added to previously earned interest.
What is the simple interest formula?
The formula is SI = P × R × T ÷ 100, where P is the principal, R is the annual rate and T is time in years.
Can I calculate interest for months or days?
Yes. Months are divided by 12 and days are divided by 365 to convert the selected period into years.
Is simple interest the same as compound interest?
No. Simple interest applies only to the original principal. Compound interest also applies to previously accumulated interest.
Where is simple interest commonly used?
It is commonly used for some personal loans, short-term lending, savings estimates, education examples and basic financial planning.