HIFreeTools

Free Simple Interest Calculator

Calculate simple interest — interest charged only on the original principal — and the total amount owed or earned.

Result
Interest
150.00
Final amount
1,150.00

Simple interest only (no compounding). Estimate for information.

Quick answer

Simple interest is calculated only on the original principal, using I = P × r × t, where P is the principal, r is the annual rate as a decimal, and t is the time in years. The final amount is the principal plus the interest, A = P + I.

Formula & method

I = P × r × t;   A = P + I
  • I — interest
  • P — principal (starting amount)
  • r — annual rate as a decimal (5% = 0.05)
  • t — time in years
  • A — final amount

Unlike compound interest, simple interest does not earn interest on previous interest.

Examples

Example 1: $1,000 at 5% for 3 years
Input
P = 1000, r = 5%, t = 3
Result
Interest $150, total $1,150
Why
1000 × 0.05 × 3 = 150.
Example 2: $2,500 at 4% for 6 months
Input
P = 2500, r = 4%, t = 0.5
Result
Interest $50, total $2,550
Why
2500 × 0.04 × 0.5 = 50.
Example 3: $800 at 10% for 2 years
Input
P = 800, r = 10%, t = 2
Result
Interest $160, total $960
Why
800 × 0.10 × 2 = 160.

When to use this tool

  • Estimating interest on a short-term loan that uses simple interest.
  • Checking interest on a bond or note quoted as simple interest.
  • Comparing simple versus compound growth for the same inputs.

Common mistakes

  • Entering the rate as a whole number in the formula. In the tool use 5 for 5%; in the formula r is 0.05.
  • Using months for time without converting to years (6 months = 0.5 years).
  • Confusing simple with compound interest — simple interest never compounds.

Frequently asked questions

＋ What is simple interest?

Interest calculated only on the original principal, not on accumulated interest. It grows in a straight line over time.

＋ How is it different from compound interest?

Compound interest is calculated on the principal plus previously earned interest, so it grows faster. Simple interest ignores prior interest.

＋ How do I handle months?

Convert months to years. For example, 9 months is 0.75 years.

＋ What is the formula?

I = P × r × t for the interest, and A = P + I for the final amount, where r is the annual rate as a decimal and t is years.

＋ Is this financial advice?

No. It’s an educational estimate based on the numbers you enter.

  • ✓ Free to use
  • ✓ No sign-up required
  • ✓ Runs entirely in your browser — nothing is uploaded.
  • ✓ Formula and method shown above
Last updated: How we calculateReport a correctionDisclaimer

Provided “as is” for general information only — results may be inaccurate, so verify before you rely on them. No warranty; use at your own risk.

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