Simple Interest Calculator

Simple interest is calculated only on the original principal for the entire duration, using interest = principal × rate × time. Unlike compound interest, previously earned interest never itself earns more interest, so growth is linear rather than accelerating.

Worked example: 5,000 borrowed or saved at 6% a year for 3 years earns 5,000 × 0.06 × 3 = 900 in interest, for a total of 5,900. The rate is entered as an annual percentage, and part-years work too — 18 months is 1.5 years. With annual compounding, the same figures would earn about 955, because each year's interest would start earning interest too.

Simple interest is commonly used for short-term loans, certain bonds, and some promotional savings products, while most everyday savings accounts, credit cards and long-term investments use compound interest instead — see the Compound Interest Calculator if that's what you're looking for.