➗ Simple Interest Calculator
Calculate interest earned using the simple interest formula.
About this tool
Simple interest is calculated only on the original principal, never on interest already earned — common for short-term loans and some savings certificates.
Most real-world savings and investment accounts actually compound rather than staying simple — the Compound Interest Calculator shows how differently the same numbers grow.
Worked example
Lend $2,000 at 5% simple interest for 3 years and you'd earn exactly $300 in interest, no more, no less — compare that to the Compound Interest Calculator on the same numbers and compounding pulls ahead.
How to use it
- Enter the principal amount.
- Enter the annual interest rate and time period in years.
- Press Calculate to see interest earned and the final total.
Tips
- Simple interest grows in a straight line — unlike compound interest, it never accelerates.
- For long-term investing or loans that compound, use the Compound Interest Calculator instead.
- Time doesn't have to be a whole number — 1.5 years is fine.
FAQ
Where is simple interest actually used?
Short-term personal loans, car loans in some regions, and certain bonds or promissory notes.
Is simple interest better for borrowers?
Generally yes, since you're not paying interest on interest — it grows slower than compound interest.
Can I use months instead of years?
Convert months to years first, e.g. 6 months = 0.5 years.
📖 Want the fuller explanation?
See Compound vs Simple Interest for the reasoning behind this calculation, with worked examples.