Simple Interest Calculator
See how much simple interest a starting amount earns over time. Simple interest is charged only on the original principal, not on interest already earned.
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- No sign-up
Enter a principal, rate and time to see the interest earned and final balance.
Worked example
With these example inputs:
- Principal$10,000
- Annual interest rate5%
- Time5 yr
Final balance: $12,500
- Starting amount$10,000
- Total interest$2,500
- Total of payments$12,500
Frequently asked questions
What is simple interest?
Simple interest is calculated only on the original principal, using interest = principal × rate × time. Unlike compound interest, the interest already earned does not itself earn more interest.
How is simple interest different from compound interest?
With simple interest the balance grows in a straight line, because each period adds the same fixed amount. Compound interest grows faster over time because it pays interest on previously earned interest.
When is simple interest used?
It is common on some short-term loans, car loans and bonds, where interest is set against the original amount rather than a changing balance.