Money
Simple Interest Calculator
The interest on a deposit or a debt, no formulas needed
With this simple interest calculator you get the interest and the final amount of a deal where interest is always calculated on the original principal.
The key idea
Simple interest is not for decades: it is for short terms
With simple interest, the interest is never reinvested. $10,000 at 5% for 18 months earns $750. Over 20 years it would earn $10,000, while compound interest added once a year would earn about $16,533.
How it is calculated
I = P × r × t Final amount = P + I
r is the annual rate as a decimal and t the time in years (months / 12, days / 365). Unlike compound interest, the interest does not earn more interest.
Worked example
$10,000 at 5% for 18 months: I = 10,000 × 0.05 × 1.5 = $750. Final amount: $10,750.
Typical cases
Simple interest on $10,000 by rate and time
The interest a $10,000 principal earns or costs with simple interest, which is never added back to the principal.
| Annual rate | 1 year | 2 years | 3 years | 5 years | 10 years |
|---|---|---|---|---|---|
| 2% | $200.00 | $400.00 | $600.00 | $1,000.00 | $2,000.00 |
| 3% | $300.00 | $600.00 | $900.00 | $1,500.00 | $3,000.00 |
| 4% | $400.00 | $800.00 | $1,200.00 | $2,000.00 | $4,000.00 |
| 5% | $500.00 | $1,000.00 | $1,500.00 | $2,500.00 | $5,000.00 |
| 6% | $600.00 | $1,200.00 | $1,800.00 | $3,000.00 | $6,000.00 |
| 8% | $800.00 | $1,600.00 | $2,400.00 | $4,000.00 | $8,000.00 |
| 10% | $1,000.00 | $2,000.00 | $3,000.00 | $5,000.00 | $10,000.00 |
Save or share this table as an image Common questions
Frequently asked questions
What is simple interest?
It is interest always calculated on the original principal, without adding the interest already earned. The formula is I = P × r × t, with r as a decimal and t in years.
Simple or compound interest?
Up to one year the difference is small; beyond one year, compound interest pays more because interest earns interest. Compare it with the compound interest calculator.
How much interest does $10,000 earn at 4% in 6 months?
$200 before taxes: 10,000 × 0.04 × 0.5. Interest can be taxable, so what you keep may be a little less.
Why does my bank show a slightly different number?
Because it may count days on a 360-day basis instead of 365, or compound the interest. On a 360-day basis, the same term earns a bit more interest. This calculator uses 365 days.
Where is simple interest used?
In short deals: some short-term loans, certain notes that pay at maturity and late-payment interest on a debt. Loans and investments over several years usually use compound interest.
How do I find the rate if I know the interest?
Solve the formula for r: r = I / (P × t). If $10,000 earned $750 in 18 months, r = 750 / (10,000 × 1.5) = 0.05, which is 5%.
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