Simple Interest Calculator
Calculate simple interest on a principal over time.
A simple interest calculator computes interest using the formula principal × rate × time, without compounding.
How to Use the Simple Interest Calculator
- Enter the principal. Type the amount borrowed or invested.
- Enter the rate and time. Set the annual interest rate and number of years.
- Read the result. See the interest and total amount.
This tool processes your input locally in your browser. Nothing is uploaded.
What Is Simple Interest?
Simple interest is calculated only on the original principal, making it easy to understand and common for short-term loans and savings.
Formula
Interest = principal × rate × time, where rate is a decimal (e.g. 5% = 0.05). Total = principal + interest.
Simple vs compound
Simple interest does not add interest to the principal, so it grows linearly. Compound interest grows faster because interest earns interest.
Key Features
- Interest amount
- Total amount
- Transparent formula
Examples
- $1,000 at 5% for 3 years = $150 interest, $1,150 total.
Common Use Cases
- Short-term loans
- Bonds
- Basic savings
Tips & Best Practices
- Use compound interest for long-term investments.
Limitations
- Does not model compounding or payments.
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Frequently Asked Questions
What is simple interest?
Interest calculated only on the original principal: principal × rate × time.
How is it different from compound interest?
Simple interest does not compound, so it grows linearly.
Is it free?
Yes, and it runs locally.