How to use the simple interest calculator
Enter the principal, the annual interest rate, and the time in years. The calculator returns the interest earned or owed and the total amount, using the simple interest formula I = P × r × t. For a period in months, enter the equivalent fraction of a year. Everything runs in your browser.
Interest that grows in a straight line
Simple interest is the most straightforward way interest can accrue: it applies only to the original principal, never to interest already earned. That makes it easy to predict — the amount added each year is the same — and it is why many short-term and personal loans use it. Understanding simple interest is also the foundation for grasping how compound interest differs.
Simple versus compound
The key contrast is what the interest is charged on. Simple interest stays tied to the principal, while compound interest is added to the balance and then earns interest itself. Over a year or two the gap is small, but over long periods compounding pulls far ahead. If you are looking at a savings account or a long-term investment, our compound interest calculator is the better fit; for a fixed short-term loan, this simple interest tool is what you want. Nothing you enter is stored.