Simple Interest Calculator

How to use Simple Interest Calculator

1. Enter the principal, the amount borrowed or deposited.
2. Enter the annual interest rate as a percentage.
3. Enter the time and choose whether it is in years, months or days.
4. Read the interest earned, the total amount and the number of years used in the calculation.

What simple interest means

Simple interest is the most basic way to charge or earn interest. The interest is worked out on the original amount only, at a fixed yearly rate, for the length of time involved. Nothing is added back and re-charged, which is why the interest for each year stays identical. It is common in short-term loans, some bonds and fixed-term deposits, school maths problems and quick estimates.

Because it is so predictable, simple interest is easy to check by hand. This calculator saves the arithmetic and handles the unit conversion when your period is given in months or days.

Formula and worked example

Interest I = P × R × T ÷ 100, where P is the principal, R is the annual rate in percent and T is the time in years. Total amount A = P + I. For months use T = months ÷ 12, and for days use T = days ÷ 365.

Example: a principal of 10,000 at 5 percent per year for 2 years gives I = 10,000 × 5 × 2 ÷ 100 = 1,000, so the total is 11,000. The same loan for 6 months uses T = 0.5 and earns 250. For 90 days, T = 90 ÷ 365 = 0.2466 and the interest is about 123.29.

Tips and limits

Always check how the lender defines the year and the rate. A rate quoted per month, for example, must be converted to a yearly figure before you use it here.

• Use the same time unit as the rate: this tool expects a rate per year.
• Real loans often compound or add fees, so the simple figure is a baseline, not a final bill.
• Interest on money you borrow reduces what you can spend, so compare the total cost of different offers.
• The result is an estimate, not financial advice.
• Your numbers never leave your browser.

Why use this simple interest calculator tool

• Years, months or days. Months are divided by 12 and days by 365 to convert to years.
• Formula shown. Uses I = P × R × T, with the guide explaining each term.
• Clear totals. See interest and principal plus interest at a glance.
• Runs offline. Calculated on your device with nothing uploaded.

Frequently asked questions

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