Simple Interest Calculator
Calculate simple interest on a principal.
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Calculate simple interest
Simple interest is charged only on the original principal, never on interest already added, which makes it easy to work out. Enter the principal, the annual rate and the number of years to get the interest and the final balance. Many short-term loans, some bonds and basic savings products use this straightforward method.
Simple versus compound
Over a short period the two are close, but across many years compound interest pulls well ahead because it keeps building on previous interest.
Frequently asked questions
What is the simple interest formula?
Interest equals principal times the annual rate times the number of years. The final balance is the principal plus that interest.
When is simple interest used?
It is common for short-term loans, car loans in some regions, and certain bonds, where interest does not compound on itself.