Simple interest is charged or earned only on the original amount, so it grows by the same sum every year. Use this calculator to find the interest and total amount for any principal, annual rate and time period — entered in years, months or days.
Simple Interest Calculator
Calculate simple interest and total amount using principal, annual interest rate and time period.
Results are estimates for educational purposes and are not financial advice. Actual returns depend on your provider's terms, fees and taxes.
Simple interest formula
SI = (P × R × T) ÷ 100 | Total amount A = P + SI
- SI
- Simple interest — the interest earned or paid.
- P
- Principal — the original amount deposited or borrowed.
- R
- Annual interest rate as a percentage (for 6%, R = 6).
- T
- Time in years. Months are divided by 12; days are divided by 365.
- A
- Total amount at the end: principal plus interest.
Day-count convention: when you enter days, this calculator uses a 365-day year (known as Actual/365 Fixed), so T = days ÷ 365. Some lenders use a 360-day year (Actual/360), which produces slightly more interest for the same number of days. Check your agreement if exact cents matter.
How to use the simple interest calculator
- Enter the principal amount — the money you deposit, lend or borrow.
- Enter the annual interest rate. Always use the yearly rate, even if the period is in months or days.
- Enter the time period and choose years, months or days.
- Pick your currency, then press Calculate.
- Read the interest earned and total amount. Open Calculation breakdown to see the formula with your numbers, or press Copy summary to paste the result elsewhere.
Worked example
You lend $5,000 to a family member at 6% simple interest for 3 years.
- Write down the values: P = 5,000, R = 6, T = 3.
- Multiply: 5,000 × 6 × 3 = 90,000.
- Divide by 100: SI = 90,000 ÷ 100 = $900.
- Add the principal: A = 5,000 + 900 = $5,900.
The interest is the same $300 in each of the three years. Two more quick checks you can try in the calculator:
- Months: $10,000 at 6% for 18 months → T = 18 ÷ 12 = 1.5 years → SI = 10,000 × 6 × 1.5 ÷ 100 = $900.
- Days: $10,000 at 5% for 90 days → T = 90 ÷ 365 = 0.246575 years → SI = $123.29.
When simple interest is used
- Short-term loans and notes — personal loans between individuals, promissory notes and some business credit.
- Car loans and some personal loans — many amortising loans calculate each month’s interest as simple interest on the outstanding balance.
- Treasury bills and short deposits — interest for a fixed number of days is often quoted on a simple basis.
- Late-payment interest — statutory or contractual interest on overdue invoices is usually simple.
- Learning and exams — simple interest is the starting point for understanding all interest calculations.
Assumptions and limitations
- Interest is calculated on the original principal only. Interest is never added to the balance, so there is no compounding.
- The rate stays fixed for the whole period.
- No deposits, withdrawals or repayments are made during the term. For a loan you repay in instalments, the interest falls as the balance falls, so this calculator would overstate it.
- Taxes, fees and penalties are not included.
- Day-based periods use a 365-day year, as explained above.
If interest is added to your balance and then earns interest itself, use the Compound Interest Calculator instead.
Frequently asked questions
How do I calculate simple interest for months?
Divide the number of months by 12 to convert it to years, then use SI = P × R × T ÷ 100. For 9 months, T = 0.75. This calculator does the conversion for you when you choose “Months”.
How do I find the total amount with simple interest?
Add the interest to the principal: A = P + SI. You can also use A = P × (1 + R × T ÷ 100) in one step.
Why is simple interest lower than compound interest?
With compound interest, interest is added to the balance and then earns interest itself. Simple interest never does that, so for the same rate and time it is always equal to or lower than compound interest. The gap grows with time and rate.
Is simple interest calculated on 360 or 365 days?
It depends on the contract. This calculator uses 365 days. Under a 360-day convention the same 90-day example would give $125.00 instead of $123.29.
Can the interest rate or time be zero?
The rate can be zero (the interest will be zero). The time period must be greater than zero, and the principal cannot be negative.