Simple Interest Calculator
Work out simple interest and the final balance from principal, rate and time.
Processing: This tool runs entirely in your browser. Your input and any file you open stay on your device — nothing is uploaded to a server.
How to use the simple interest calculator
- Fill in the fields — they start with a worked example.
- Read the answer, and the arithmetic shown beneath it.
- Copy the results, or adjust the inputs to compare scenarios.
About this tool
Simple interest is charged only on the original amount, never on interest already accrued: I = P × r × t. It is the arrangement behind many short-term consumer loans, some bonds and most informal lending between people.
That makes it cheaper than compound interest over the same rate and term, and the gap widens with time. Over one year at a single annual charge the two agree; over ten years they diverge sharply, which is why it is worth knowing which one a contract actually uses.
Common uses
- Checking the interest on a short-term loan.
- Working out what a friend owes on an informal loan.
- Comparing a simple-interest quote against a compound one.
Frequently asked questions
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus interest already added, so it grows faster.
- Is the rate annual?
- Yes. Enter the annual rate and the time in years — six months is 0.5.
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