Overview
Simple interest is calculated only on the original principal, not on accumulated interest. This calculator helps you see the interest earned or paid over a fixed period using a straightforward formula, so you can compare deposit offers, short-term lending terms, or classroom examples without manual arithmetic. If you already know any two of the three inputs, the result still makes sense only when the time period matches the rate convention you are using. Annual rates are usually expressed per year; if your period is in months or days, convert it consistently before interpreting the result. The calculator returns the interest amount and the total amount at maturity, making it easier to review the full outcome in one place.
Use cases
- Fixed-term savings estimateEstimate how much interest a small deposit earns over a known number of years at a fixed annual rate.
- Short-term private loan termsCheck the interest charged on a simple, fixed-rate loan where no compounding is applied.
- Classroom finance exercisesUse the formula to verify homework problems or demonstrate how principal, rate, and time affect the result.
How it works
- 1
Enter the principal amount, annual rate, and time period.
- 2
The calculator applies the simple interest formula: Interest = Principal × Rate × Time.
- 3
Review the interest and total amount, then adjust the inputs if you want to compare another scenario.
Examples
Deposit growth over 3 years
Input: Principal: 5,000; Rate: 4%; Time: 3 years
Output: Interest: 600; Total amount: 5,600
A deposit held for three years at a fixed annual rate.
One-year borrowing cost
Input: Principal: 12,000; Rate: 7.5%; Time: 1 year
Output: Interest: 900; Total amount: 12,900
Shows the cost of a short-term loan without compounding.
Six-month period
Input: Principal: 8,000; Rate: 6%; Time: 0.5 years
Output: Interest: 240; Total amount: 8,240
A half-year example where the time value is entered in years.
FAQ
Does this calculator include compound interest?
No. It calculates only simple interest, which uses the original principal for the entire period. If interest is added to the balance and then earns interest again, you need a compound interest calculator instead.
What should I enter for time if the period is not a full year?
Use a time value consistent with the rate. For an annual rate, months can be converted into fractions of a year, such as 6 months = 0.5 years.
Why do I get a different result from a bank statement?
Banks may round differently, use day-count conventions, or apply compound interest. If the product you are checking uses those rules, this calculator will not match it exactly.
Can I use monthly or daily rates?
Yes, but the rate and time must use the same basis. For example, a monthly rate should be paired with months, and a daily rate with days.