About the simple interest calculator
Simple interest is charged or earned only on the original principal, not on accumulated interest. It’s used for some short-term loans, certain bonds, and many classroom problems, and it’s a helpful baseline for comparing against compound interest.
How to use this calculator
- Enter the principal.
- Enter the annual interest rate.
- Enter the time in years (use decimals for months, e.g. 0.5).
Worked examples
- I = 10,000 × 0.05 × 3 = $1,500
- Total = $11,500
$1,500 interest.
Measurement guidance
Months and days
For 18 months, use 1.5 years. Some lenders count days differently; check your agreement.
Frequently asked questions
How is simple interest different from compound?
Simple interest uses only the original principal; compound interest also earns interest on previous interest.
Is this financial advice?
No. It’s a general calculation.