Simple Interest Calculator
Calculate simple interest with I = P × r × t. Enter the principal, annual rate and time in years, months or days to get the interest; add it to the principal for the total.
Last updated: October 2026
Interest
$1,500.00
This calculator gives an estimate for general information only. It is not financial, tax or investment advice. Check the figures with a qualified professional before making decisions, and follow the rules that apply where you live.
Formula below · 3 sources (investor.gov, treasurydirect.gov, openstax.org) · Updated Oct 2026
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About this calculator
Simple interest is charged or earned on the original principal only. Interest is not added back to the balance, so it grows by the same amount every year.
I = P × r × t
P is the principal, r is the annual rate as a decimal (5% = 0.05) and t is the time in years. Months are converted with t = months ÷ 12 and days with t = days ÷ 365. The total you repay or receive at the end is A = P + I = P × (1 + r × t).
With the defaults, $10,000 at 5% for 3 years earns 10,000 × 0.05 × 3 = $1,500, for a total of $11,500.
Compound interest at the same rate earns more, because interest earns interest. $10,000 at 5% for 3 years compounded annually grows to $11,576.25, which is $76.25 more than simple interest. Over 30 years the gap is large: simple interest adds 150% of the principal, annual compounding about 332%.
Where you meet simple interest: short-term loans and notes, some court judgments, and interest on overdue invoices. Many auto and personal loans are called simple-interest loans because each month's interest is figured on the balance still owed; for those, use a loan payment calculator instead. Some contracts count a year as 360 days, which gives slightly more interest on a daily basis than the 365-day year used here.
Simple vs. annually compounded interest on $10,000 at 5%
Scroll sideways to see all columns →
| Years | Simple interest | Compound interest | Difference |
|---|---|---|---|
| 1 | $500 | $500 | $0 |
| 3 | $1,500 | $1,576 | $76 |
| 5 | $2,500 | $2,763 | $263 |
| 10 | $5,000 | $6,289 | $1,289 |
| 20 | $10,000 | $16,533 | $6,533 |
| 30 | $15,000 | $33,219 | $18,219 |
How to use
Enter the principal, the annual rate, and the time, then choose whether the time is in years, months or days. The result is the interest only; add the principal to get the total. Example 1: $10,000 at 5% for 3 years. I = 10,000 × 0.05 × 3 = $1,500. Total: $11,500. Example 2: $2,500 at 6% for 18 months. Choose Months and enter 18. I = 2,500 × 0.06 × 1.5 = $225. Example 3: an $8,000 invoice paid 90 days late with 8% annual interest. Choose Days and enter 90. I = 8,000 × 0.08 × 90 ÷ 365 = $157.81.
Frequently asked questions
What is the simple interest formula?
I = P × r × t: principal times the annual rate (as a decimal) times the time in years. The total amount is P + I. For example, $1,000 at 4% for 2 years earns 1,000 × 0.04 × 2 = $80.
How is simple interest different from compound interest?
Simple interest is always figured on the original principal. Compound interest is figured on the principal plus interest already earned, so it grows faster. Over one year with annual compounding they are equal; over longer periods compound interest pulls ahead.
How do I find the rate or the time instead?
Rearrange the formula: r = I ÷ (P × t) and t = I ÷ (P × r). If $5,000 earned $600 in 4 years, the rate is 600 ÷ (5,000 × 4) = 0.03, or 3%.
Should I use 360 or 365 days?
Use whatever your contract says. This calculator uses a 365-day year for days. Some banks and commercial contracts use a 360-day year, which raises the daily interest by about 1.4%.
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Sources & references
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