tools / finance
Simple Interest Calculator
Calculate interest, principal, rate, or time using the simple interest formula I = P × r × t.
$
%
years
$
Interest Earned
$1,500.00
$10,000.00
Principal
$1,500.00
Interest
$11,500.00
Total (P + I)
15.00%
Total Return
Formula
I = P × r × t = $10,000.00 × 0.0500 × 3.00 = $1,500.00
FAQ
- What is the simple interest formula?
- I = P × r × t, where P is principal, r is the annual interest rate as a decimal, and t is time in years. The total amount is P + I.
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus previously earned interest — so interest earns interest. Over time, compound interest grows significantly faster.
- When is simple interest used?
- Simple interest is common in short-term loans, car loans, some personal loans, and US savings bonds. Most long-term investments and mortgages use compound interest.
- How do I calculate simple interest for months instead of years?
- Divide the number of months by 12 to get t in years. For a 6-month period, use t = 0.5. For 18 months, use t = 1.5.
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