Simple Interest Calculator
Interest that doesn't compound: I = P × r × t. Common for short-term loans, some CDs, and bond coupons.
Ad · leaderboard
Inputs
$
%
Total interest
$900.00
Final value: $5,900.00
Principal
$5,000.00
Interest earned
$900.00
Final amount (P + I)
$5,900.00
Ad · rectangle
Ad · in-content
How it works
I = P × r × t, where r is the annual rate as a decimal and t is time in years. Interest is not reinvested.
Frequently asked questions
Simple vs. compound interest?
Simple interest is calculated only on the original principal. Compound interest also earns interest on prior interest — so it grows faster.
Where is simple interest used?
Auto loans, some personal loans, Treasury bill discount, and traditional bond coupons (each coupon is on face value).
Which is better for a saver?
Compound interest — you want your interest to earn interest.
Which is better for a borrower?
Simple interest — you don't pay interest on interest.
Does the formula change for fractional years?
No — t can be any positive value, e.g. 2.5 years.
Related calculators
Ad · anchor