💵 Simple Interest Calculator
Calculate simple interest on loans or investments. Find principal, rate, time, or total interest.
Simple Interest: I = P × R × T
Leave one field blank to solve for it.
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Interest Earned
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Total Amount
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Principal
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Rate
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Time
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Simple vs. Compound Interest
Simple Interest: I = P × R × T
Total Amount: A = P + I = P(1 + RT)
Compound Interest: A = P(1 + r/n)^(nt)
Total Amount: A = P + I = P(1 + RT)
Compound Interest: A = P(1 + r/n)^(nt)
Simple interest is calculated only on the principal — interest doesn't earn interest. It's used for short-term loans, auto loans, and some bonds. Compound interest, where interest accumulates on previous interest, is used for mortgages, savings accounts, and investments.
Example Comparison — $10,000 at 5% for 5 years
| Type | Interest Earned | Total |
|---|---|---|
| Simple | $2,500 | $12,500 |
| Compound (monthly) | $2,834 | $12,834 |
| Compound (daily) | $2,840 | $12,840 |
When is simple interest used? +
Simple interest is common for: auto loans, short-term personal loans, US Treasury bills, some student loans, and installment loans. For anything longer-term like mortgages, savings accounts, or investment accounts, compound interest applies. Always check your loan agreement to know which method applies.