Savings & Banking
Simple Interest Calculator
Simple interest is charged only on the original principal, never on interest already accrued. Enter an amount, rate, and time to see the interest and total, plus how much more compound interest would add.
Formula shown below · Tested against worked examplesHow we verify
Total value: $11,500
Total value
$11,500
- Simple interest
- $1,500
- Principal
- $10,000
- Extra from compounding
- $115
What monthly compounding would add over simple interest.
Compare scenariosTry three values of one input
| Principal amount | |||
|---|---|---|---|
| Total value | $10,350 | $11,500+$1,150 | $12,650+$2,300 |
| Simple interest | $1,350 | $1,500+$150 | $1,650+$300 |
| Principal | $9,000 | $10,000+$1,000 | $11,000+$2,000 |
| Extra from compounding | $103 | $115+$11 | $126+$23 |
Every other input stays at the value you set above — currently $10,000 for principal amount. Differences are measured against the first column.
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How this calculator works
Simple interest = principal × annual rate × years; total = principal + interest, in exact cents. The 'extra from compounding' figure computes the same principal and rate with monthly compounding and shows the difference.
Real loans and accounts may compound daily or monthly and include fees — use this for a clean estimate, and see our Compound Interest calculator for growth that compounds.
Formula
I = P × r × t
A = P + I- I
- Total interest
- P
- Principal
- r
- Annual rate, as a decimal
- t
- Time in years
- A
- Final amount
Simple interest is charged only on the original principal, so it grows linearly rather than accelerating. It assumes the full principal stays outstanding — on an amortising loan the balance falls with every payment, so the real interest is considerably lower.
What this assumes
- Interest is charged only on the original principal, so it grows linearly rather than accelerating.
- It assumes the full principal stays outstanding for the whole period — on a real amortising loan the balance falls with every payment, so the true interest is far lower.
- No fees, and no compounding of unpaid interest.
What changes this number
- Time
- Interest scales directly with it, unlike compound interest where time accelerates the effect.
- Principal
- Scales linearly too, which is what makes this the simplest of all the models here.
- Whether the loan actually amortises
- The most important caveat: most real loans do, so this overstates their cost.
A worked example
Take the $10,000 at 5% for 3 years scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Principal amount
- $10,000
- Annual interest rate
- 5%
- Time period
- 3 years
What it returns
- Total value
- $11,500
- Simple interest
- $1,500
- Principal
- $10,000
- Extra from compounding
- $115
Sources
This calculator uses no external data — the result follows entirely from the formula above and the values you enter, so there is nothing to cite beyond the arithmetic.
Calculator last reviewed August 8, 2026. How we verify
Try an example
Frequently asked questions
How do you calculate simple interest?
Multiply the principal by the annual rate and the number of years: interest = principal × rate × time. $10,000 at 5% for 3 years earns $10,000 × 0.05 × 3 = $1,500, for an $11,500 total. Unlike compound interest, it never charges interest on interest.
What's the difference between simple and compound interest?
Simple interest is figured only on the original principal, so it grows in a straight line. Compound interest is figured on the principal plus all prior interest, so it accelerates. Over long periods the gap is large — compounding is why savings grow and why credit-card debt spirals.
What uses simple interest?
Many auto loans and some personal loans, along with most short-term promissory notes. For borrowers, simple interest is favorable — paying early reduces the principal that interest is charged on. Savings and investments, by contrast, benefit from compounding.
Related calculators
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Calculate the monthly payment, total interest, and payoff date for any personal, auto, or fixed-rate loan — and see how extra payments shorten it.
Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.