Simple Interest Calculator
Calculate simple interest on loans or investments. See how your money grows with our free simple interest calculator with detailed breakdowns.
Formula:I = P × r × t
Interest Results
Total Interest
$1,500
Total Amount
$11,500
Principal + Interest
Principal$10,000
Interest Rate5% per year
Time Period3 years
Effective Rate15.00%
Loan / Investment Details
Enter your principal, rate, and time
1,000100,000
%
0.130
Interest Growth Over Time
Principal
Interest
Interest Breakdown
Interest earned per time period
Per Year
$500
Per Month
$42
Per Day
$1
How Simple Interest is Calculated
Understanding the I = P x R x T formula
Simple Interest Formula:
I = P × R × T
I = Interest earned
P = Principal (initial amount)
R = Annual interest rate (as decimal)
T = Time (in years)
Your Calculation:
I = $10,000 × 0.0500 × 3.0000 years
I = $1,500
Total Amount Formula:
A = P + I
A = $10,000 + $1,500 = $11,500
Interest Rate Comparison
See how different rates affect your earnings
| Rate | Interest | Total | Monthly Interest |
|---|---|---|---|
| 2% | $600 | $10,600 | $17/mo |
| 4% | $1,200 | $11,200 | $33/mo |
| 6% | $1,800 | $11,800 | $50/mo |
| 8% | $2,400 | $12,400 | $67/mo |
| 10% | $3,000 | $13,000 | $83/mo |
| 12% | $3,600 | $13,600 | $100/mo |
What if the rate was different?
See how different interest rates affect your earnings
1.0%5.0%20.0%
Total Interest
$1,500
Total Amount
$11,500
Monthly Interest
$42
Personalized Insights
1 insight based on your inputs
Simple vs Compound
With compound interest, you'd earn $1,576 instead of $1,500. Consider compound interest for long-term savings.
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Frequently Asked Questions
Simple interest is calculated only on the original principal amount. Unlike compound interest, simple interest doesn't earn interest on previously earned interest. The formula is I = P × R × T, where P is principal, R is annual interest rate, and T is time in years.
Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus accumulated interest. Over time, compound interest grows faster. Simple interest grows linearly; compound interest grows exponentially.
Simple interest is commonly used for short-term loans, car loans, some personal loans, certificates of deposit (CDs), Treasury bills, and calculating interest for partial periods. It's simpler to calculate and often used for periods under a year.
Convert the time period to years: for months, divide by 12; for days, divide by 365. Then use the formula I = P × R × T. For example, 6 months = 0.5 years, 90 days ≈ 0.247 years.
The effective interest rate shows the total percentage return over the entire period. For simple interest, it's the annual rate multiplied by time. A 5% annual rate for 2 years gives a 10% effective rate (total interest earned relative to principal).
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Joseph OrdunaFounder & Software Engineer
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).
Interest Results
Total Interest
$1,500
Total Amount
$11,500
Principal + Interest
Principal$10,000
Interest Rate5% per year
Time Period3 years
Effective Rate15.00%