Simple Interest Calculator

Calculate simple interest and the total amount for years, months or days.

How simple interest is calculated

Simple interest = principal × rate × time, where the rate is a decimal (6% is 0.06) and the time is in years. Months are divided by 12 and days by 365. The interest is always charged on the original amount, never on interest already earned.

Worked examples

• $5,000 at 6% for 3 years: 5,000 × 0.06 × 3 = $900 of interest, so $5,900 in total.
• $10,000 at 4.5% for 18 months: 10,000 × 0.045 × 1.5 = $675.
• $2,000 at 5% for 90 days: 2,000 × 0.05 × 90 ÷ 365 = $24.66.

Simple versus compound interest

With compound interest, you also earn interest on the interest. The same $5,000 at 6% for 3 years earns $955.08 with annual compounding, compared with $900 of simple interest. The difference grows with time and higher rates. For savings that compound, use the compound interest calculator.

Frequently asked questions

Where is simple interest used?

It is often used for short-term loans, some auto and personal loans, and some bonds. Check your loan or account terms to see how interest is calculated.

How do I calculate simple interest for months or days?

Convert the time to years first. Divide months by 12 and days by 365, then multiply principal, rate and time.

Does simple interest include the principal?

The formula gives only the interest. Add it to the principal to get the total amount, which the calculator also shows.

Which is better for a saver, simple or compound interest?

Compound interest earns more over time because interest is added to the balance. For a borrower the reverse is true, since compounding makes a loan cost more.

Results are estimates for general information, not financial advice.