Simple Interest Calculator
Interest on a flat balance, without compounding. e.g. “How much interest on $5,000 at 4% for 3 years?”
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Results update as you type. All calculation happens in your browser.
Methodology
Interest on a flat balance, without compounding. This tool uses a standard, documented formula and runs entirely on your device.
Last reviewed January 2026 · Runs client-side
Simple interest, without the compounding
Simple interest is charged only on the original principal, never on accumulated interest. It's the model behind many short-term loans and some fixed deposits, and it's the cleanest way to understand what a rate actually costs before compounding complicates the picture.
Because the interest each period is constant, the math is straightforward: multiply the principal by the rate by the time. That makes it easy to sanity-check a lender's figure or compare a simple-interest product against a compounding one.
How to use this calculator
- Enter the principal amount.
- Add the annual interest rate.
- Set the time in years to see the interest and total value.
What the inputs mean
- Principal
- The original amount borrowed or invested.
- Annual rate
- The yearly interest rate, entered manually.
- Time
- The number of years the interest accrues.
$5,000 at 4% for three years earns $600 of simple interest, for a total of $5,600.
The formula, in plain terms
I = P × r × t, interest equals principal times the annual rate times the number of years.
Good to know
- Over the same rate and term, compound interest always yields more than simple interest.
- Watch the time units, the rate and time must both be expressed per year.
Frequently asked questions
When is simple interest used?
It's common on short-term and some auto or personal loans, and on certain bonds and deposits. Longer-term products usually compound.
Last reviewed January 2026. This explainer is general information, not professional advice.