This simple interest calculator finds the interest earned or paid on a loan, deposit or bond using the classic I = P × r × t formula. Enter the principal, annual rate and time — in years, months or exact days between two dates — to get the interest and the final maturity value instantly.
What Is Simple Interest?
Simple interest is interest charged or earned only on the original principal. It never compounds — the interest itself does not earn interest. That makes it easy to calculate and predictable, which is why it is used for many car loans, short-term loans, bonds and classroom problems. It is also the foundation everything else in our Finance Calculators collection builds on.
The Simple Interest Formula
I = P × r × t and A = P + I = P(1 + rt)
- I = interest earned or paid
- P = principal (starting amount)
- r = annual interest rate as a decimal (5% = 0.05)
- t = time in years
- A = final amount (maturity value)
If your time is in months, divide by 12; in days, divide by 365. This calculator handles all three — and an exact two-date mode — automatically. Percentages are the input here; if you need help with percent math itself, see our Percentage Calculator.
Simple Interest Examples (Verified)
- Savings example: $10,000 at 5% for 3 years → interest = 10,000 × 0.05 × 3 = $1,500, maturity value $11,500.
- Exact-days example: $5,000 at 6% for 180 days → interest = 5,000 × 0.06 × (180 ÷ 365) = $147.95. Use the "Between two dates" mode for this kind of calculation.
- Monthly example: $2,400 at 8% for 9 months → interest = 2,400 × 0.08 × 0.75 = $144, maturity value $2,544.
Simple Interest vs. Compound Interest
With simple interest, a $10,000 deposit at 5% earns exactly $500 every year, forever. With compound interest it earns $500 in year one, $525 in year two, $551.25 in year three — because each year's interest also starts earning interest. Over 3 years the difference is small ($1,500 vs $1,576.25); over 30 years it is enormous ($25,000 vs $43,219.42 total value). Most savings and investment accounts compound; most simple-interest products are short-term. Compare them side by side with our Compound Interest Calculator, or see how simple interest applies to a borrowing schedule in the Loan Calculator.
Where Simple Interest Is Used
- Car loans and short-term personal loans — many are simple-interest, so early payoff genuinely saves money.
- Bonds — coupon payments are simple interest on the face value.
- Short-term notes and T-bills — priced on a simple, day-count basis.
- Late fees and some student-loan interest — calculated simply on the balance.
Related Tools
- Compound Interest Calculator — interest on interest, compared
- Percentage Calculator — percent of, increase and decrease
- Loan Calculator — monthly loan payments
Frequently Asked Questions
How do I calculate simple interest?
Multiply the principal by the annual rate (as a decimal) by the time in years: I = P × r × t. $10,000 × 0.05 × 3 = $1,500.
How do I calculate simple interest for months?
Convert months to years first (months ÷ 12). For 9 months, t = 0.75. Or just select "Months" in the calculator above.
How do I calculate simple interest between two dates?
Count the days between the dates, divide by 365 to get t, then apply I = P × r × t. The calculator's two-date mode does the counting for you.
What is the maturity value?
The total you receive (or owe) at the end: A = P + I. On a deposit it is principal plus all interest; on a loan it is the total repayment before fees.
Is simple interest better for borrowers or lenders?
Borrowers pay less with simple interest over long periods, because interest never compounds. Lenders and investors earn more from compounding. Short terms make the difference small either way.
Is this calculator free?
Yes — free, instant, and no sign-up.