Simple Interest Calculator
Calculate simple interest: I = P × r × t
Interest Earned$1,500.00
Total Amount$11,500.00
Interest that does not compound: I = P × r × t. Use compound interest when interest is added back to the balance (savings accounts, most investments).
Formula
I = P × r × t, with r as a decimal and t in years. Total = P + I.
How to calculate
- Enter principal P.
- Enter the annual rate as a percent; the page converts it to a decimal.
- Enter time in years. Interest is P × r × t; it does not earn interest on itself.
Example
$2,000 at 5% simple interest for 3 years: I = 2000 × 0.05 × 3 = $300. Total is $2,300.
Common mistake
Banks almost never pay simple interest on deposits. If the product compounds, this page understates the ending balance.
FAQ
What is the simple interest formula?
I = P × r × t. $2,000 at 5% for 3 years is $300 of interest.
When should I use compound interest instead?
When interest is added to the balance and then earns more interest — savings, CDs, and most investments. Use the compound interest calculator.