Simple Interest Calculator
Work out simple interest in a tap with SI = P×R×T ÷ 100 — then see, side by side, exactly how much more the same money would earn with compound interest over the same period. The clearest way to understand the difference.
Simple vs compound interest
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Year-by-year comparison
The simple interest formula
Simple interest is charged only on the original principal — never on interest already earned — so it grows by the same amount every year. The formula is:
SI = P × R × T ÷ 100
where P is the principal, R is the annual rate in percent, and T is the time in years. The total you repay or receive is simply the principal plus the interest. For example, $10,000 at 8% for 5 years earns $4,000 in simple interest, for a total of $14,000.
Simple vs compound — the key difference
Because simple interest ignores accumulated interest, it grows in a straight line. Compound interest, by contrast, pays interest on interest, so it curves upward and pulls ahead — and keeps pulling ahead the longer the money stays invested. The chart above plots both totals for your figures, and the banner shows exactly how much extra compounding would earn over your chosen period. For a saver, that gap is the entire case for compound growth; for a borrower, simple interest is usually the cheaper deal.
Where simple interest is used
You'll meet simple interest in short-term and flat arrangements: some car and personal loans, certain fixed deposits and treasury bills, and short bridging finance. It's valued for being transparent and predictable — the charge is easy to see and never snowballs. That predictability is exactly why it's common where terms are short.
How to read your result
Enter your principal, rate and time with the sliders or by typing them, choose a currency, and read off the simple interest and total amount. Then look at the comparison: the wider the gap between the blue (simple) and green (compound) lines, the more compounding would add. Everything is calculated in your browser, so your figures stay private.
Frequently asked questions
What is the simple interest formula?
SI = P × R × T ÷ 100, where P is principal, R is the annual rate in percent and T is years. The total is principal plus interest, and interest is charged only on the original principal.
What's the difference between simple and compound interest?
Simple interest grows linearly (only on principal); compound interest grows exponentially (on principal plus accumulated interest). For the same inputs, compound always yields more, and the gap widens over time.
When is simple interest actually used?
In short-term or flat arrangements — some car/personal loans, certain fixed deposits, treasury bills and bridging finance — where a transparent, predictable charge is wanted.
Is simple or compound interest better for me?
Borrowing: simple is usually cheaper. Saving or investing: compound is far better. The comparison above shows the difference for your exact numbers.
How do I calculate the total amount?
Total = P + (P × R × T ÷ 100). E.g. 10,000 at 8% for 5 years = 4,000 interest, total 14,000.