How to use Simple Interest Calculator
The simple interest calculator works out the interest and total repayable on a loan or deposit using the classic P·r·t formula. Enter the principal, the annual interest rate, and the time in years, and it returns the interest earned and the final total, plus a year-by-year balance table. Unlike compound interest, simple interest is charged only on the original amount — this tool makes that difference clear and runs entirely in your browser.
- Enter the principal amount.
- Enter the annual interest rate as a percentage.
- Enter the time in years.
- Read the interest earned, the total, and the balance table.
Your data never leaves your device — 100% private processing.
Simple versus compound interest
The key difference is what the interest is charged on. Simple interest always uses the original principal, so a $1,000 balance at 5% earns exactly $50 every year, no matter how long the term. Compound interest adds each period’s interest to the balance, so the next period earns interest on a larger amount — the growth accelerates. Over short periods the two are close, but over many years compound interest pulls well ahead. Knowing which one a loan or savings product uses is essential to comparing offers fairly, because a headline rate means very different things under each method.
| Years | Simple total | Compound total |
|---|---|---|
| 1 | $1,050 | $1,050 |
| 5 | $1,250 | $1,276 |
| 10 | $1,500 | $1,629 |
Reading the balance table
The year-by-year table shows how the balance grows in a straight line under simple interest. Because the interest each year is a fixed share of the original principal, the balance increases by the same amount every year — the line is perfectly straight, unlike the upward curve of compound interest. This makes simple interest easy to predict: multiply the annual interest by the number of years and add it to the principal. The table is handy for confirming a lender’s figures, planning repayments on a flat-rate loan, or seeing exactly how much a fixed deposit will be worth at the end of its term.
Worked examples
Standard
Inputs: $1,000 · 5% · 3y
Result: $150 interest · $1,150 total
Zero rate
Inputs: $1,000 · 0% · 5y
Result: $0 interest · $1,000 total
Half year
Inputs: $2,000 · 6% · 0.5y
Result: $60 interest · $2,060 total
Glossary
- Principal
- The original amount borrowed or deposited, on which interest is calculated.
- Simple interest
- Interest charged only on the principal, the same each period.
- Compound interest
- Interest charged on the principal plus previously accrued interest.
- Term
- The length of time over which interest is applied.
Related reading
Frequently Asked Questions
Why use Simple Interest Calculator?
- Calculates interest and total from principal, rate, and time
- Uses the exact simple-interest formula (P × r × t ÷ 100)
- Shows a clear year-by-year balance breakdown
- Formats amounts in your chosen currency, all in your browser
Common use cases
- Estimate the cost of a short-term or flat-rate loan
- Work out the interest on a fixed deposit or bond
- Compare a simple-interest offer against a compound one
- Check homework or coursework on the simple-interest formula
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