📐 Simple Interest Calculator
Simple Interest Calculator — I = P × R × T
Solve for any variable in the simple interest formula. Calculate interest earned, find the principal, rate, or time — with a period-by-period schedule and simple vs compound comparison.
I = P × R × T
·
A = P + I
I = Interest
P = Principal
R = Rate (annual)
T = Time (years)
A = Future Value
🔢 Solve for Any Variable
📅 Days / Months / Years
📊 Period Schedule
⚖️ vs Compound Interest
Simple Interest Calculator
I = P × R × T · A = P + I
Find:
Enter Values
$
$
%
$0
Principal (P)
$0
Interest (I)
$0
Future Value (A)
0%
Rate × Time
Formula Applied
I = P × R × T
= $10,000 × 6% × 5 = $3,000
📊 Principal vs Interest
⚖️ Simple vs Compound Interest — Same Inputs
📐 Simple Interest
Interest Earned$0
Future Value$0
Total Return0%
📈 Compound (Monthly)
Interest Earned$0
Future Value$0
Total Return0%
Compound earns $X more than simple over this period.
📋 Year-by-Year Breakdown
| Period | Opening Balance | Interest Earned | Closing Balance | Cumulative Interest |
|---|---|---|---|---|
| Enter values to see schedule | ||||
The Simple Interest Formula Explained
Simple interest is calculated using one straightforward formula: I = P × R × T
- I = Interest earned or owed (in dollars)
- P = Principal — the original amount borrowed or invested
- R = Annual interest rate as a decimal (6% = 0.06)
- T = Time in years
The future value (total amount) is: A = P + I = P(1 + RT)
Rearranging to solve for any variable: P = I/(R×T) · R = I/(P×T) · T = I/(P×R)
Simple Interest Examples
| Principal | Rate | Time | Interest (I) | Future Value (A) |
|---|---|---|---|---|
| $5,000 | 4% | 3 years | $600 | $5,600 |
| $10,000 | 6% | 5 years | $3,000 | $13,000 |
| $25,000 | 8% | 2 years | $4,000 | $29,000 |
| $1,000 | 5% | 6 months | $25 | $1,025 |
| $15,000 | 7.5% | 90 days | $277.40 | $15,277.40 |
Simple vs Compound Interest Comparison
| Period | $10,000 @ 6% — Simple | $10,000 @ 6% — Compound (Monthly) | Difference |
|---|---|---|---|
| 1 year | $10,600 | $10,617 | $17 |
| 5 years | $13,000 | $13,489 | $489 |
| 10 years | $16,000 | $18,194 | $2,194 |
| 20 years | $22,000 | $33,102 | $11,102 |
| 30 years | $28,000 | $60,226 | $32,226 |
Frequently Asked Questions
Simple interest is calculated only on the original principal — never on accumulated interest. It grows linearly: the same dollar amount of interest is earned each period. Formula: I = P × R × T. It's most commonly used for short-term loans, bonds, and some savings instruments.
Rearrange the formula: Principal P = I / (R × T); Rate R = I / (P × T); Time T = I / (P × R). Use the four buttons at the top of the calculator to select which variable you want to find — enter the other three and the calculator solves instantly. For example, if you paid $1,500 interest at 5% over 3 years, the principal was $1,500 / (0.05 × 3) = $10,000.
Simple — use our time unit dropdown. Select Months or Days and enter the number. The calculator converts automatically: months ÷ 12 = years; days ÷ 365 = years. For example, 90 days = 0.2466 years; $10,000 at 6% for 90 days = $10,000 × 0.06 × (90/365) = $147.95 interest.
Simple interest is generally better for borrowers because the interest doesn't compound — you only pay interest on the original principal, not on accumulated interest. For lenders and investors, compound interest is better because interest earns additional interest over time. This is why most consumer loans (mortgages, credit cards) use compound/amortized interest, not simple interest.
Simple interest is used for: short-term personal loans, auto title loans, US Treasury bills (T-bills), some bonds (coupon payments calculated on face value), certain installment loans, promissory notes, and business trade credit (net-30, net-60 terms). Most long-term financial products — mortgages, credit cards, savings accounts — use compound interest.