Interest Calculator

Our simple interest calculator helps you calculate the interest earned or paid on a principal amount over a specific time period at a fixed interest rate.

Simple Interest vs Compound Interest

Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal and accumulated interest. Simple interest is commonly used for short-term loans and some certificates of deposit.

The Formula

Simple Interest = Principal × Rate × Time
Total Amount = Principal + Simple Interest

Applications

• Short-term personal loans
• Car loans and some installment loans
• Some certificates of deposit (CDs)
• Bond interest calculations

Example

Principal: $10,000, Rate: 5%, Time: 3 years
Interest = $10,000 × 0.05 × 3 = $1,500
Total Amount = $11,500