Simple Interest Calculator
Calculate simple interest on a deposit or loan for any number of years, months or days.
For information only. Results are estimates based on the numbers you enter and a constant rate. They are not financial, tax or investment advice — real returns, fees, taxes and lender terms vary. Speak to a qualified adviser before making financial decisions.
How it works
- Enter the principal amount.
- Enter the annual interest rate and the time period in years, months or days.
- See the simple interest and the total amount.
Frequently asked questions
What is the simple interest formula?
Simple interest = P × R × T ÷ 100, where P is the principal, R the annual rate in percent and T the time in years. The total amount is P plus the interest.
How is simple interest different from compound interest?
Simple interest is charged only on the original principal. Compound interest is also charged on interest already earned, so it grows faster over time.
How are months and days converted?
Months are divided by 12 and days by 365 to express the period in years, which is the common convention for simple interest.
Where is simple interest used?
Some short-term loans, car loans in certain countries, bonds' coupon payments and many classroom problems use simple interest.
Simple interest explained
Simple interest is calculated only on the original amount you deposit or borrow, so it grows by the same amount every year. It's used for many short-term loans, some deposits and bonds, and in school maths.
Example
10,000 at 5% simple interest for 3 years earns 10,000 × 5 × 3 ÷ 100 = 1,500, for a total of 11,500. With compound interest the same deposit would earn slightly more, because interest would also earn interest.