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Loans — Interest
Simple Interest Calculator
Enter the principal, rate and time to get the simple interest and the total.
Interest
—
Simple interest earned or owed.
| Total (principal + interest) | — |
|---|---|
| Principal | — |
| Time in years | — |
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Enter your figures above to see the step-by-step working.
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How the Simple Interest Calculator Works
Simple interest is charged only on the original principal, never on accumulated interest. That makes it the easiest interest to calculate: multiply the principal by the annual rate by the time in years. It is common on short-term loans, some car loans and certain bonds.
Enter the principal, the annual rate and the time (in years or months), and the calculator returns the interest and the total. Because interest never compounds here, doubling the time simply doubles the interest — unlike compound interest, which accelerates.
I = P × r × t
Frequently Asked Questions
How is simple interest different from compound?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus previously earned interest, so it grows faster over time.
When is simple interest used?
It is common on short-term and some auto loans, certain personal loans, and many bonds and treasury instruments. Savings accounts and most long-term loans use compounding instead.
How do I handle a time in months?
Convert months to years by dividing by twelve, since the rate is annual. This calculator does that automatically when you choose months as the time unit.
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