Simple Interest Calculator
Calculate interest on principal without compounding
$
%
yrs
Simple Interest
—
Principal
—
Total Amount
—
What is Simple Interest?
Simple interest is calculated only on the principal amount, not on accumulated interest. The formula is: I = P × R × T, where P is principal, R is annual rate, and T is time in years. It is commonly used for short-term loans and some savings products.
Formula
I = P × R × T
Total = P + I
Where:
P = Principal
R = Annual rate ÷ 100
T = Time in years
Example
A principal of $5,000 at 6% per year for 3 years: Interest = 5000 × 0.06 × 3 = $900. Total = $5,900.
Frequently asked questions
Simple interest is calculated only on the original principal. Compound interest is calculated on principal plus accumulated interest, leading to faster growth over time.