Simple interest
Interest equals principal × annual rate × time, without compounding.
How this works
Simple interest I = P × r × t, where P is principal, r is the annual percentage rate divided by 100 and t is years. Principal plus interest = P + I. Interest is calculated only on the initial principal, without compounding.
Example
The illustration may use different inputs from the reproducible default inputs listed below.
At the defaults, $1,000 × 0.05 × 3 = $150 interest; adding the principal gives $1,150. With all reset-default inputs, simple interest: $150.
- Principal ($)
- 1000
- Annual rate (%)
- 5
- Years
- 3
- Simple interest
- $150
Scope and assumptions
Assumes a fixed principal and annual rate for the entered period. Does not model repayments, deposits, fees, taxes or daily interest conventions. Fractional years are accepted, but the calculator does not convert calendar dates into a lender-specific year fraction.
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