Simple Interest Calculator

Find the simple interest earned (or owed) on a principal over a set number of years.

Simple interest

Principal ($)

Annual rate (%)

Time (years)

Enter the principal, the annual interest rate, and the time in years. Simple interest is charged only on the original principal.

Interest = principal × rate × time Total = principal + interest

Example: $1,000 at 5% for 3 years → interest = 1000 × 0.05 × 3 = $150, total $1,150.

Example: A $2,500 loan at 8% for 2 years → $400 interest, $2,900 to repay.

What is the difference between simple and compound interest?

Simple interest applies only to the original principal; compound interest also earns interest on earlier interest.

What is the simple interest on $1000 at 5% for 1 year?

$50 — 1000 × 0.05 × 1.

Do loans use simple interest?

Many short-term loans and car loans use simple interest; mortgages and credit cards usually use compound/amortized methods.