Simple Interest Calculator
Calculate interest charged only on the original principal, using a chosen annual rate and time period.
Simple interest
Constant nonnegative simple rate; no compounding, fees, tax or principal repayments. The 365-day convention may differ from a lender’s actual/360, actual/actual or other day-count basis.
Formula checked · NumberSwift · Review process
For informational purposes only. Results are estimates and do not constitute financial advice.
How this calculator works
Simple interest grows in proportion to the original principal and elapsed time. Interest is not added to the balance before calculating later interest. Convert months or days to years so the time basis matches the annual rate. The total amount is principal plus the calculated interest, not a monthly repayment schedule. Compound Interest is the next step when earned interest itself earns returns.
Formula
Interest I = principal P × annual rate r/100 × time t in years. Total amount = P + I. Months convert using 12/year; days use 365/year.
Assumptions & limitations
Constant nonnegative simple rate; no compounding, fees, tax or principal repayments. The 365-day convention may differ from a lender’s actual/360, actual/actual or other day-count basis.
Worked example
10,000 at 5% simple annual interest for 2 years earns 10,000 × 0.05 × 2 = 1,000. Principal plus interest is 11,000 in the same currency.
Our approach to calculations ↗Common questions
Does simple interest earn interest on earlier interest?
No. The interest calculation always uses the original principal.
Can I use this for a loan paid down each month?
Not as a complete repayment model. A decreasing balance changes interest charges; use Loan for fixed-rate monthly amortization.
Why might a lender’s day-based figure differ?
Contracts can use different day-count conventions and rounding. This tool explicitly uses 365 days per year.