What is the Simple Interest Calculator? A simple interest calculator works out interest charged only on the original amount: interest = principal × rate × time. It also shows the total amount and how it compares with compounding.
How to use the Simple Interest Calculator
- Enter the principal, the amount borrowed or invested.
- Enter the interest rate, and choose whether it is quoted per year or per month.
- Set the time in years and extra months.
- Read the interest, the total amount and the yearly breakdown.
Frequently asked questions
What is the simple interest formula?
Simple interest = principal × rate × time, with the rate as a fraction per year and time in years. The total amount is the principal plus that interest.
How do I calculate simple interest on a monthly rate?
Multiply the monthly rate by 12 to get the yearly rate: 2% a month is 24% a year. Choose "Per month" and the calculator does this for you.
How is simple interest different from compound interest?
Simple interest is earned on the original amount only. Compound interest is also earned on interest already added, so it grows faster over longer periods.
Results are estimates based on the inputs you enter, not guaranteed returns or financial advice.