Calculate simple and compound interest on savings or loans.
Simple interest is the most fundamental form of interest calculation — and understanding it is the foundation for understanding all other interest types. It's used for short-term personal loans, some savings bonds, auto dealer financing promotions, and many money market instruments.
Our Interest Calculator computes simple interest in seconds: enter your principal, annual interest rate, and time period, and instantly see the interest earned or owed, and the total amount (principal + interest).
Enter the principal (starting amount), the annual interest rate as a percentage, and the time period in years, months, or days. The calculator converts the time period to years and applies the simple interest formula.
You lend a friend $3,000 at 5% simple interest for 18 months (1.5 years).
Total repayment: $3,000 + $225 = $3,225
Now compare to compound interest at the same rate:
Simple interest ($3,225) is actually slightly more in this case because compound interest hasn't had enough time to significantly compound. Over 10 years, the difference would be dramatic — compound interest would yield $4,887 vs. simple interest's $4,500.