Simple Interest Calculator

1. Enter any three of interest, principal, annual rate and time.
2. Use an annual rate as a percentage and time in years.
3. Leave the one you want to find blank.
4. Read the result and the total amount.

Here is what each result means:

Simple interest is interest charged only on the original amount, called the principal. It does not build on interest already earned, so the amount added is the same every period. This makes it easy to calculate and predict, which is why it is used for many short-term loans, car finance and some bonds.

The rule is interest equals principal times rate times time. The rate is the annual percentage and the time is in years, so a 1,000 principal at 5 percent for 3 years earns 5 percent of 1,000, which is 50, in each of the 3 years, for 150 in total. Add that interest to the principal and you get the total amount owed or received.

Because simple interest ignores compounding, it grows in a straight line rather than a curve. Over short periods the difference from compound interest is small, but over many years compound interest pulls well ahead. Knowing which one applies to a loan or investment is essential to comparing offers fairly.

It rearranges one relation to solve for whichever value you leave blank.

1. For interest, multiply principal by the rate (as a decimal) by time.
2. For principal, divide interest by the rate times time.
3. For rate or time, divide interest by the product of the other two.

For interest that builds on itself, see the compound interest calculator and the percentage calculator.

Invest a principal of 1,000 at 5 percent a year for 3 years.

Calculation: I = P r t = 1000 x 0.05 x 3 = 150. The total amount is 1,000 plus 150, which is 1,150. To find the rate that turns 1,000 into 150 of interest over 3 years, divide: 150 over 3,000 is 5 percent.

One relation, rearranged for whatever you need to find.

All four come from I equals P r t, so any three of the values give the fourth. Remember to write the rate as a decimal in the formula, so 5 percent becomes 0.05, which this calculator handles for you.

The two grow money very differently, especially over long periods.

For short terms the gap is small, but over decades compound interest wins by a wide margin. Simple interest is common for short loans and some fixed-income products, while savings and long-term investments almost always compound.

The Principal

A larger principal earns more interest, in direct proportion. Double the principal and you double the interest.

The Rate

A higher annual rate means more interest each year, again in direct proportion.

The Time

More years means more total interest, since the same amount is added each year.

Short-term Loans

Work out the interest on car finance, personal loans or a short bond.

Comparing Offers

Find the rate or time implied by a quoted interest amount.

Homework and Budgeting

Solve for any part of a simple interest problem quickly.

1. Using a Percent as a Whole Number

In the formula the rate is a decimal, so 5 percent is 0.05. This calculator converts it for you.

2. Mismatched Time Units

Time must be in years to match an annual rate. Convert months to years by dividing by 12.

3. Confusing It with Compound

Simple interest does not build on itself. Use the compound calculator for savings accounts.

4. Forgetting the Total

The amount owed is the principal plus the interest, not the interest alone.

5. Zero in a Divisor

Solving for principal, rate or time cannot divide by zero.

The relation is exact; only the displayed decimals are rounded.

Simple interest is interest charged only on the original principal, not on interest already earned. It equals principal times rate times time, so a 1,000 principal at 5 percent for 3 years earns 150.

Multiply the principal by the annual rate as a decimal by the time in years. For 1,000 at 5 percent for 3 years, that is 1,000 times 0.05 times 3, which is 150.

Divide the interest by the rate times the time. Leave the principal field blank and enter interest, rate and time, and the calculator solves for it.

Simple interest is charged only on the principal, so it grows in a straight line. Compound interest is charged on the principal plus past interest, so it grows faster over time.

The total amount is the principal plus the interest. For a 1,000 principal that earns 150 in interest, the total amount is 1,150.

Enter it as a percent, such as 5 for 5 percent. The calculator converts it to a decimal, 0.05, inside the formula for you.

Convert months to years by dividing by 12, since the rate is annual. Six months is 0.5 years, and 18 months is 1.5 years.

It is common for short-term loans, car finance, some personal loans and certain bonds. Savings accounts and long-term investments usually use compound interest instead.

No. The calculation runs in your browser and nothing you enter is stored or sent anywhere, unless you choose Save, which keeps the result only on this device.

• Interest (Wikipedia).
• Simple interest (Maths Is Fun).
• Compound interest (Wikipedia).