Use our Simple Interest Calculator to calculate interest, final balance, principal, rate, or time. Compare simple and compound interest with yearly schedules and step-by-step calculations.
Total Simple Interest
Final Ending Balance
How Simple Interest Calculator calculations work.
Simple interest is interest calculated directly from the original principal for the selected period. The standard formula is I = Prt, where P is principal, r is the annual interest rate in decimal form, and t is time in years.
The simple interest formula is I = Prt. The final ending amount is A = P + I, which can also be factored as A = P(1 + rt).
For ten years: I = $20,000 × 0.03 × 10 = $6,000. The final balance is therefore $20,000 + $6,000 = $26,000.
Divide the percentage by 100. For example, 3% becomes 0.03, 4.5% becomes 0.045, and 12% becomes 0.12.
Convert months into fractional years by dividing by 12 (t = months / 12). For example, 18 months equals 1.5 years. Then apply I = Prt.
Use the calculator's stated 365-day convention to convert days into fractional years: t = days / 365. Then substitute the resulting time fraction into I = Prt.
Yes. Rearranging the simple-interest formula gives P = I / (rt), or from the ending balance, P = A / (1 + rt). The calculator's Principal mode solves this inverse calculation automatically.
Yes. When principal, interest, and time are known, the implied rate is r = I / (Pt). The decimal result is then converted into a percentage.
Yes. Rearranging the formula gives t = I / (Pr). The calculator expresses the resulting duration according to your selected time unit (years, months, weeks, or days).
Simple interest is calculated strictly from the original principal, whereas compound interest incorporates accumulated interest into subsequent calculations, producing exponential growth over time.
No. Under the simple-interest model, previously earned interest is never added back to the principal base for calculating future interest payments.
No. A real loan may use monthly amortization, periodic compounding, daily accrual, fees, or prepayment provisions. Always verify your specific retail installment contract or loan agreement.