Simple Interest Calculator
Compute simple interest (I = P·r·t) and compare it with compound growth.
Inputs
Allowed range: 0 to 1000000000
Allowed range: 0 to 100
Allowed range: 0 to 100
Results
How it works
Simple interest is calculated only on the original principal: I = P × r × t, where r is the annual rate (decimal) and t is the time in years. Unlike compound interest, earned interest is never reinvested.
Complete guide
Use simple interest for short-term loans, some auto loans, and bonds that pay a fixed coupon without reinvestment.
Enter principal, annual rate, and time in years. We return the interest earned, the final balance (P + I), and — for reference — what the same deposit would grow to under annual compounding.
If the comparison balance is meaningfully higher, that is the cost of not compounding (or the benefit of choosing a compounding product).
Frequently asked questions
- When is simple interest used in practice?
- Short-term personal loans, some car loans, Treasury bills, and many bonds (coupon payments do not auto-reinvest).
- How does it differ from compound interest?
- Simple interest grows linearly; compound interest grows exponentially because each period earns interest on prior interest.