Simple Interest Calculator
Interest charged only on the original amount — with the formula shown.
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interest
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How simple interest works
Simple interest is calculated only on the original principal, using:
Interest = P × R × T ÷ 100
where P is the principal, R is the annual rate as a percentage, and T is the time in years. The total you repay or receive is the principal plus that interest. Unlike compound interest, the interest never earns interest of its own.
FAQ
How is this different from compound interest?
Simple interest is charged only on the starting principal for the whole term. Compound interest is charged on the principal plus interest already added, so it grows faster over time.
When is simple interest used?
It's common for short-term loans, some car loans, and quick estimates. Many savings products and mortgages use compound interest instead.