Simple Interest Calculator

Written byOleh Soloninupdated 25 September 2026

Currency

Solve for

Starting amount (principal)

Annual interest rate, %

Term in

Term, years

Result

Interest earned

$1,500.00

Final amount

$11,500.00

Working

10,000 × 5% × 3 = 1,500

Interest per month

$41.67

With monthly compounding

$11,614.72

Compounding would add

$114.72

Simple vs compound by year

Year          Simple  Monthly comp.    Difference
 1 yr         10,500         10,512            12
 2 yr         11,000         11,049            49
 3 yr         11,500         11,615           115

This result is informational only and is not professional advice.

Starting amount$10,000.00

Change$1,500.00

Interest on the original amount only, for any term, with the working

Work out simple interest with I = P × r × t for a term in years, months or days, with the working shown. Solve for the principal or the rate, and compare the result with monthly compounding.

Simple interest is charged or paid on the original amount only. However long the term, the base never changes, so every year adds the same sum. That is how interest works on a bond with a fixed coupon, on savings where the interest is paid out rather than added to the balance, and on loans whose agreement charges interest on the principal alone.

The calculator shows the interest, the final amount and the formula with your numbers, and underneath it, what monthly compounding would have produced. The gap between the two is the interest on interest that a simple arrangement never pays.

How to use

Choose what to solve for: the interest and final amount, the principal needed for a target, or the rate that turns one amount into another.
Enter the term in years, months or days. For days, pick the day count your agreement uses: 365, 366 or 360.
Read the result and the Working line, which shows the formula with your numbers in it.

The simple interest formula

Simple interest is I = P × r × t, where P is the principal, r is the annual rate as a decimal (5% = 0.05) and t is the time in years. The final amount is A = P × (1 + r × t). For a term in months, t = months / 12; for days, t = days / 365, or whatever day count the agreement names.

Rearranging the same formula gives every other value: the principal P = A / (1 + r × t), the rate r = (A / P − 1) / t, and the time t = (A / P − 1) / r.

Amounts worked out with this calculator.
Solve for	Formula	Example
Interest	I = P × r × t	10,000 × 5% × 3 = 1,500
Final amount	A = P × (1 + r × t)	10,000 × (1 + 0.05 × 3) = 11,500
Interest for months	I = P × r × m / 12	10,000 × 5% × 6 / 12 = 250
Interest for days	I = P × r × d / 365	10,000 × 5% × 90 / 365 = 123.29
Principal	P = A / (1 + r × t)	11,500 / 1.15 = 10,000
Rate	r = (A / P − 1) / t	(11,500 / 10,000 − 1) / 3 = 5%
Time	t = (A / P − 1) / r	(11,500 / 10,000 − 1) / 0.05 = 3 years

Simple vs compound interest

With compound interest, each interest payment is added to the balance, so the next one is calculated on a bigger base. Simple interest grows in a straight line; compound interest curves upward. Over one year the difference is small, but over twenty years at 5% compounding pays roughly a third more.

The practical rule follows from that: at the same rate, a borrower is better off with simple interest and a saver with compounding.

Final amount on 10,000 at 5% a year. Worked out with this calculator.
Term	Simple interest	Monthly compounding	Difference
1 year	10,500	10,511.62	11.62
5 years	12,500	12,833.59	333.59
10 years	15,000	16,470.09	1,470.09
20 years	20,000	27,126.40	7,126.40

Days, months and day-count conventions

For short terms, count days rather than months: a 91-day term is not exactly a quarter of a year, and interest by the day is more precise. The divisor is set by the agreement: 365, 366 or 360 days. A 360-day year gives slightly more interest for the same number of days.

The calculator does not deduct tax on interest or any fees, so compare its figure with the gross interest in your statement.

What this calculator shows

Interest and final amount for a term in years, months or days
The working, with your numbers substituted into the formula
The principal needed for a target amount, or the rate between two amounts
What monthly compounding would add, with a year-by-year table

What to keep in mind

The rate stays the same for the whole term and interest is never added to the balance.
Tax on interest and fees are not included.
A term in months counts twelfths of a year; a term in days is divided by 365, 366 or 360 as selected.
The comparison with compounding appears for terms in whole months.

FAQs

How do I calculate simple interest?

Multiply the principal by the annual rate as a decimal and by the time in years: 10,000 × 0.05 × 3 = 1,500. For months divide by 12, and for days divide by the number of days in the year.

What is the difference between simple and compound interest?

Simple interest is always calculated on the original principal, so it adds the same amount each year. Compound interest also earns on interest already added: 10,000 at 5% for 20 years becomes 20,000 with simple interest and 27,126.40 with monthly compounding.

How do I work out interest for a number of days?

Use P × r × d / 365: 10,000 at 5% for 90 days earns 123.29. If the agreement uses a 360-day year, the same term earns 125.00.

How do I find the interest rate from two amounts?

Use r = (A / P − 1) / t. If 10,000 grew to 11,500 in 3 years, (1.15 − 1) / 3 = 0.05, which is 5% a year. In the calculator, choose Solve for: Interest rate.

How much do I need to invest to reach a target?

Divide the target by (1 + r × t). To have 11,500 after 3 years at 5%, you need 11,500 / 1.15 = 10,000.

How long does it take to double money with simple interest?

Doubling means A / P = 2, so t = 1 / r. At 5% that is 1 / 0.05 = 20 years. With monthly compounding the same rate doubles the money in about 13.9 years.

Is simple interest better for borrowers or savers?

At the same rate it favours borrowers, because interest is only charged on the amount borrowed. Savers do better with compounding, where interest earns interest of its own.

Worked example

A 90-day term with interest paid at the end

Input: 10,000 at 5% a year for 90 days, 365-day year

Output: Interest 123.29, total at the end 10,123.29

Note: The working is 10,000 × 0.05 × 90 / 365. On a 360-day basis the same deposit would earn 125.00.

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