Simple Interest Calculator – I = P × r × t with Yearly Table
Work out simple interest from the principal, rate and time. The calculator shows the interest, total amount, a year-by-year table and a comparison with compound interest.
Simple interest is I = P × r × t: principal times annual rate times years. 10,000 at 5 % for 3 years earns 10,000 × 0.05 × 3 = 1,500, so the total is 11,500. Enter time in years, months or days; monthly rates are converted to yearly automatically.
How to use Simple Interest Calculator
- Enter the principal (the amount borrowed or saved).
- Enter the interest rate and choose per year or per month.
- Enter the time and its unit: years, months or days.
- Read the interest and the total amount.
- Compare with compound interest in the last column of the table.
The simple interest formula
I = P × r × t, where P is the principal, r the yearly interest rate as a decimal and t the time in years. The total amount is A = P + I.
| Principal | Rate | Time | Interest | Total |
|---|---|---|---|---|
| 1,000 | 6 % | 1 year | 60 | 1,060 |
| 5,000 | 4 % | 18 months | 300 | 5,300 |
| 20,000 | 8 % | 5 years | 8,000 | 28,000 |
For months, divide by 12 (18 months = 1.5 years); for days, divide by 365. Some banks use 360 days per year for certain loans, which gives slightly more interest — check your contract.
Simple vs compound interest
With simple interest you earn interest only on the original amount. With compound interest the interest itself earns interest, so the balance grows faster over time. Over 1 year with yearly compounding they are equal; after 10 years at 8 %, 10,000 grows to 18,000 with simple interest but to 21,589 with compound interest. The table shows both side by side, and the Compound Interest Calculator calculator handles monthly or daily compounding and regular deposits.
Where simple interest is used
Car loans in some countries, short-term personal loans, many bonds (coupon payments) and some savings certificates use simple interest. Most savings accounts and credit cards compound, and mortgages use amortization — for those, use the Loan Calculator or the Mortgage Calculator.
Monthly rates
Some lenders quote a monthly rate, such as 1.5 % per month. That is 18 % per year in simple-interest terms. Choose “per month” and the calculator converts it for you. When comparing offers, always look at the effective annual rate, which the APY Calculator can work out.
Results are calculated in your browser and work with any currency.
Checking a loan offer
If a lender quotes a flat rate on the original amount, the real cost is higher than the same rate on a reducing balance, because you pay interest on money you have already repaid. Ask for the total amount payable and the effective annual rate before you sign, and compare offers on those figures rather than on the headline rate.
You may also find these free tools useful: Compound Interest Calculator, Fuel Cost Calculator and Electricity Cost Calculator.
Frequently asked questions
What is the formula for simple interest?
I = P × r × t: principal times yearly rate (as a decimal) times time in years.
How do I calculate simple interest for months?
Divide the months by 12 to get years. 9 months at 6 % on 2,000 is 2,000 × 0.06 × 0.75 = 90.
What is the difference between simple and compound interest?
Simple interest is paid only on the principal; compound interest is also paid on earlier interest, so it grows faster.
How much is 5 % simple interest on 10,000 for 3 years?
10,000 × 0.05 × 3 = 1,500 interest, for a total of 11,500.
Can I use a monthly interest rate?
Yes. Choose per month and the calculator converts it to a yearly rate.
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