Simple Interest Calculator
Calculate simple interest on a principal amount over time - interest calculated only on the original amount, with no compounding.
Total interest
$750.00
What Your Result Means
Simple interest grows at a constant, linear rate - unlike compound interest, it's calculated only on your original principal, never on previously earned interest. This makes it easy to predict but generally results in less growth than compound interest over long periods.
How It Is Calculated
Interest = Principal × Rate × Time
Worked Example
$5,000 at 5% simple interest for 3 years earns $5,000 × 0.05 × 3 = $750 in interest, for a total of $5,750.
Important Assumptions
- Assumes interest does not compound - see the Compound Interest Calculator for that scenario.
Frequently Asked Questions
- When is simple interest used?
- Simple interest is common for short-term loans, some auto loans, and certain bonds. Most savings accounts and long-term investments use compound interest instead.
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Methodology
This calculator uses the standard simple interest formula. See our methodology page for details.
This calculator provides estimates for educational purposes only. Actual rates, taxes, insurance, fees, and lender terms may differ. It does not constitute financial advice - consult a qualified financial professional before making financial decisions.