Simple Interest Calculator

About this calculator

This calculator applies the simple interest formula I = P × r × t, where interest accrues only on the original principal for the entire term rather than compounding on previously earned interest. That makes it different from a savings account or loan that compounds monthly or annually — the interest amount grows in a straight line year after year instead of accelerating.

Simple interest shows up in short-term lending and lending-adjacent contexts: promissory notes, short-term personal loans between individuals, certain bonds and treasury bills, and some auto loans that use the simple-interest method to spread charges evenly across the loan term. It's also the formula taught first in finance and math classes because it's the building block for understanding compound interest.

Lenders, borrowers drafting a private loan agreement, and students checking textbook problems all reach for this calculator because it turns principal, rate and time into an exact interest figure and payoff amount without needing a spreadsheet.