Calculate Simple Interest

Free Interest Calculator - Simple Interest Explained

Use our interest calculator to quickly compute simple interest, total amount, and time‑based breakdowns. Switch between months and years to match your scenario and compare outcomes instantly.

How to Use

  • • Enter Principal (amount invested/borrowed)
  • • Enter annual Rate in %
  • • Enter Time and choose years or months
  • • See Interest and Total instantly

What You Can Calculate

  • • Simple interest amount (I)
  • • Total maturity value (A = P + I)
  • • Time in years for monthly inputs
  • • Comparative scenarios by adjusting inputs

Simple interest is useful when interest does not compound (e.g., short‑term notes, some personal agreements). For compounding growth, use our Compound Interest Calculator.

Worked Examples

Example 1

P = $1,500, R = 8% per year, T = 6 months (0.5 years)

I = P × R × T ÷ 100 = 1500 × 8 × 0.5 ÷ 100 = $60

Total A = P + I = $1,560

Example 2

P = $2,000, R = 5%, T = 3 years

I = 2000 × 5 × 3 ÷ 100 = $300

Total A = $2,300

Tips & Best Practices

Units Matter

Convert time to years when rate is annual. For months, divide by 12.

Compare With Compounding

Compounded growth usually yields more interest for the same inputs.

Rate vs APR

Ensure the rate reflects your agreement. APR may include fees; simple interest does not.

Simple Interest vs Compound Interest

Simple Interest

Interest is calculated only on the original principal. Formula: I = P × R × T ÷ 100

Compound Interest

Interest is calculated on principal and accumulated interest. Use the compound interest tool to project growth across periods.

Simple Interest Formula

Formula

I = P × R × T ÷ 100

Where P = Principal, R = Annual Rate (%), T = Time (years).

Example

P = $1,000, R = 6%, T = 2 years → I = $120, Total = $1,120.