How to use this simple interest calculator
- Enter the principal (starting amount), nominal annual interest rate (%), and how long the money earns interest—years or months.
- Read total interest, ending balance, and step-by-step math in the results panel.
- Optional: under regular contributions, add deposits or withdrawals (interest is not reinvested).
- Compare the same inputs to compound interest or open the compound calculator pre-filled from the results.
- Switch the schedule by year or month; download CSV or print; copy link to share your scenario in the URL.
Example: $10,000 at 5% for 10 years
With simple interest, I = 10,000 × 0.05 × 10 = $5,000 interest and A = $15,000 ending balance. Each year in the schedule shows $500 interest on the original $10,000 (lump-sum mode).
The same $10,000 at 5% compounded monthly for 10 years would grow to about $16,470—use the comparison in the calculator to see the gap on your numbers.
What is simple interest?
Interest is the cost of borrowing or the return on lending. Simple interest is calculated on the principal only (for a one-time deposit, each period uses the same opening principal). It does not pile prior interest on top of the balance for the next period. That differs from compound interest, where earned interest becomes part of the balance and earns more later.
Simple interest formula
I = P × r × t A = P + I
P = principal, r = annual rate as a decimal (5% → 0.05), t = time in years. Six months is t = 0.5. Another form is I = P × r × n when r is the rate per period and n is the number of periods (for example monthly r and n months).
Classic check: $20,000 at 3% for 10 years → I = 20,000 × 0.03 × 10 = $6,000, A = $26,000.
Simple vs compound interest
Simple interest is linear in time: double the years, double the interest (same P and r). Compound interest curves upward because the base grows. Short-term products sometimes quote simple interest; most savings accounts compound daily or monthly. For growth projections, use our compound interest calculator; for APY on savings quotes, use the APY calculator.
When is simple interest used?
Some personal loans, promissory notes, and textbook problems use simple interest. Auto loans and credit cards often use different accrual methods. Always confirm with your lender’s disclosure—not this page—for an official payment or payoff figure.
Frequently asked questions
What is simple interest?
Interest calculated on the principal (or running balance with flows) without reinvesting prior interest into the balance for lump-sum schedules.
What is the simple interest formula?
I = P × r × t; ending amount A = P + I. Use t in years or as a fraction of a year.
What is the difference between simple and compound interest?
Compound interest adds interest to the balance each period. Simple interest accrues but, for a one-time deposit, yearly interest stays based on the opening principal. See the in-app comparison or the compound interest calculator.
When is simple interest used?
Some loans and notes; many savings products compound instead. This tool is for estimates and learning, not legal loan quotes.
What happens if I add monthly deposits?
Interest accrues on the balance after flows, but earned interest is not added to principal for the next period’s simple-interest rule.
Why might my bank or lender show a different number?
Different day-count conventions, rounding, fees, or compounding vs simple. Use this page as a planning estimate.
Can I compare simple vs compound on the same inputs?
Yes—in the results panel, then open the compound calculator with one click for the same principal, rate, and term.
Can I export, print, or share my inputs?
Copy link, CSV export for the schedule, and print-friendly summary plus table.