Simple Interest Calculator
Calculate simple interest on any loan or investment with I = P × r × t. Enter the principal, annual rate and time — in days, months or years — to get the interest, the total amount, a monthly accrual schedule, plus a reverse solver and a simple-vs-compound comparison.
Months ÷ 12 and days ÷ 365 are converted to years, because the rate is annual.
Same principal, rate and time — simple interest charges only the original principal, while compound interest (yearly) reinvests each year's interest. See how the gap grows.
Compound assumes interest is reinvested yearly at the same rate: A = P × (1 + r)t.
Monthly interest accrual schedule
Simple interest accrues at a constant rate on the unchanged principal, so each month adds the same amount.
| Month | Interest this month | Cumulative interest | Balance owed |
|---|---|---|---|
| Enter values and press Calculate. | |||
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How simple interest is calculated
- I = interest, P = principal, r = annual rate as a decimal, t = time in years.
- Worked example: $10,000 × 0.05 × 3 = $1,500 interest; total $11,500.
- Reverse: P = I ÷ (r × t), r = I ÷ (P × t), t = I ÷ (P × r).
Disclaimer: This calculator is for educational and planning purposes only and is not financial advice. Real loans may include fees, taxes, different day-count conventions, or early-repayment terms that change what you actually pay.
Simple interest FAQs
What is the simple interest formula?
Simple interest is I = P × r × t, where P is the principal (the amount borrowed or invested), r is the annual interest rate as a decimal, and t is the time in years. The total amount is A = P + I. Example: $10,000 at 5% per year for 3 years gives I = 10,000 × 0.05 × 3 = $1,500 of interest, for a total of $11,500.
How do I calculate simple interest on a loan?
Multiply the loan principal by the annual rate (as a decimal) and by the time in years. A $10,000 loan at 5% annual simple interest for 3 years costs 10,000 × 0.05 × 3 = $1,500 in interest, so you repay $11,500 in total. Enter your own numbers above — the calculator converts days and months to years automatically.
How are months and days converted to years?
Because the rate is annual, time must be in years: divide months by 12 and days by 365. So 18 months is 1.5 years and 90 days is about 0.2466 years. Pick the time unit in the calculator and the conversion is applied for you.
What is the difference between simple interest and compound interest?
Simple interest is charged only on the original principal, so the yearly charge never changes. Compound interest is charged on the principal plus accumulated interest, so it grows faster. For example, $10,000 at 5% for 10 years produces $5,000 of simple interest (total $15,000) but about $6,288.95 with yearly compounding (total about $16,288.95) — a gap of about $1,288.95. See the comparison tab for a side-by-side chart.
How do I find the principal, rate, or time from a known interest amount?
Rearrange I = P × r × t: P = I ÷ (r × t), r = I ÷ (P × t), t = I ÷ (P × r). Example: $56 of interest on an $800 loan over 18 months (1.5 years) means an annual rate of 56 ÷ (800 × 1.5) = 0.0467, about 4.67%. The Solve tab does this arithmetic for you.
Where is simple interest used in real life?
Simple interest shows up in short-term personal loans, some auto loans, and flat-rate financing, where the lender quotes one fixed interest charge for the whole term. Most mortgages, credit cards, and savings accounts compound instead. Always read the loan agreement: fees, taxes, and repayment schedules change the real cost of borrowing.
Is this calculator financial advice?
No. This calculator is for education and planning only and is not financial advice. Results are illustrative estimates from the standard simple-interest formula. Real loans can include fees, taxes, different day-count conventions, or early-repayment terms that change what you actually pay.
What does the monthly accrual schedule show?
It spreads the total interest evenly over each month of the term, because simple interest accrues at a constant rate on the unchanged principal. For $10,000 at 5% over 3 years, that is $41.67 per month for 36 months, totaling $1,500. If you repay principal early, the real interest would be lower — the schedule assumes the full principal stays outstanding.
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