Simple interest calculator
Principal, rate, and time — in years, months, or days: instantly get the interest earned and the final balance, with the formula worked out step by step.
The simple interest formula
Simple interest is calculated as I = P × r × t: principal times annual rate times time expressed in years. The final balance is A = P + I. If the time is in months, divide by 12; if it's in days, divide by 365 (this tool uses a 365-day year, the most common convention — some financial products use 360 instead). Example: $5,000 at 3% for 18 months gives 5,000 × 0.03 × 1.5 = $225 in interest. It's the typical math behind short-term loans, payment plans, bond coupons, and late-payment charges.
Simple vs. compound interest: what's the difference?
With simple interest, interest is always calculated on the original principal only, so growth is a straight line. With compound interest, the interest you earn is added to the principal and starts earning interest itself, so growth accelerates over time. Over short periods the gap is tiny ($5,000 at 3% for 1 year: $150 either way), but over 20 years simple interest earns $3,000 while compound interest earns more than $4,000. For the compound version, Toolopoli has a dedicated calculator. This tool provides estimates for informational purposes only and is not financial advice.