Money
Simple Interest Calculator
By the Dailycaltor team · formula-verified · last updated July 2026
The classic I = P × R × T, instantly.
$
Interest earned
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Details
Principal—
Total (principal + interest)—
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Formula
Simple interest = principal × annual rate × years. Unlike compound interest, it is always calculated on the original principal only, so growth is linear.
Worked examples
- $5,000 at 6% for 3 years → $900 interest, $5,900 total.
- $10,000 at 4% for 18 months (1.5 yr) → $600.
- Compound at the same terms would earn slightly more each year.
Common mistakes
- Using simple interest math for savings accounts or loans that actually compound.
- Entering months as years (18 months = 1.5, not 18).
- Comparing a simple-interest quote against a compound APR as if equal.
Last updated: July 2026. Educational estimates only.
Questions
What is the simple interest formula?
I = P × R × T: principal times the annual rate (as a decimal) times years.
Where is simple interest used?
Short-term loans, some auto and personal loans, bonds' coupon math, and classroom finance.
Simple vs compound interest?
Simple pays on the principal only; compound pays on principal plus accumulated interest, growing faster over time.
How do I enter months?
Divide by 12: 6 months is 0.5 years.
Is my bank account simple interest?
Almost never — savings accounts compound. Use the compound interest calculator for those.