Simple Interest Calculator
Calculate interest earned on principal over time without compounding.
Last reviewed by the myCalculator Editorial Team
Input Parameters
Calculation Results
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Formula & How Simple Interest Calculator Works
Simple interest is calculated only on the original amount: I = P × r × t. A $10,000 deposit at 5% a year for 3 years earns 10,000 × 0.05 × 3 = $1,500, a total of $11,500. Compound interest on the same deposit, where interest is added each year and earns interest itself, grows to 10,000 × 1.05³ = $11,576.25, so the interest is $1,576.25. Simple interest is common on short-term loans, some personal loans and bonds that pay a fixed coupon. The longer the term and the higher the rate, the bigger the gap between simple and compound interest.
- Enter Principal Amount ($): Input your target parameter value.
- Enter Annual Interest Rate (%): Input your target parameter value.
- Enter Time Period (Years): Input your target parameter value.
- Apply Formula: Calculate using
I = P × r × t. - Review Results: View exact computed answers, metrics, and worked mathematical proofs.
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Frequently Asked Questions (FAQs)
What is the difference between simple and compound interest?
Simple interest pays interest only on initial principal; compound interest pays interest on principal plus accumulated past interest.
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Authoritative Standards & Verified Reference Citations
Calculations and mathematical logic on this page are grounded in published statutory rules, regulatory standards, and official government data published by the following bodies:
Consumer guidance on mortgage borrowing capacity, compound interest formulas, and loan fees.
Official cash rate target announcements, monetary policy statements, and national economic statistical data.
Official U.S. Federal Funds Rate and comprehensive macroeconomic time-series data.
Key Eurozone interest rates, deposit facility rates, and monetary policy operations.
Residential mortgage serviceability buffer framework (3.0% stress test hurdle rate).
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