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Free simple interest calculator

Simple interest grows linearly — you earn the same dollar amount of interest each period. Use this calculator to find interest earned or total repayment for any principal, rate.

Interest earned
$—
Total amount
$—
Effective return
—%
About this calculator

How it works

Simple interest uses a single formula:

I = P × r × t

VariableMeaning
IInterest earned or owed
PPrincipal (starting amount)
rAnnual rate as a decimal (rate% ÷ 100)
tTime in years

The total amount is A = P + I.

Worked example

$1,000 principal at 5% for 3 years:

  • I = 1,000 × 0.05 × 3 = $150
  • A = 1,000 + 150 = $1,150
  • Effective return = 150 ÷ 1,000 = 15%

Notes

Simple interest is common for short-term loans, car financing, and US Treasury bills. For savings accounts and mortgages, compound interest is almost always used instead.

Frequently asked

What is simple interest?
Simple interest is calculated only on the original principal — it does not compound. The formula is I = P × r × t, where P is principal, r is the annual rate as a decimal, and t is time in years.
How is simple interest different from compound interest?
With compound interest, you earn interest on previously earned interest. With simple interest, the interest is always calculated on the original principal. Over long periods, compound interest grows much faster.
What is the effective return?
The effective return is the total interest as a percentage of the principal. For simple interest it equals rate × years (e.g., 5% for 3 years = 15% total return).
Can I use this for a loan?
Yes. For simple-interest loans (common for car loans and personal loans), the interest earned shows what you'll pay in interest, and total shows your payoff amount.
How do I share my calculation?
Click "Share with my numbers" to copy a URL that restores your principal, rate, and term when opened.