Simple Interest Calculator

Fill in the figures for one deposit or loan and the results update as you type. Nothing is uploaded, because the sums are done on your own device.

1. Type the Principal, which is the amount deposited or borrowed.
2. Enter the Annual interest rate (%) as a plain percentage, for example 6 for six per cent a year.
3. Enter the length of the term in Time, then choose Years, Months or Days under Time in.
4. Pick a Currency symbol so the results read in pounds, euros, rupees or whichever currency you use.
5. Read the interest earned, the total amount, the interest per year and per month, and the comparison with yearly compounding. When the term is between 1 and 40 years, a year-by-year table appears as well.

Simple interest is charged on the original principal only, at the same rate every period. The formula is I = P x r x t, where P is the principal, r is the annual rate written as a decimal and t is the time in years. The total amount is then P + I.

Take 10,000 at 6% for 3 years. Interest is 10,000 x 0.06 x 3 = 1,800.00, so the total is 11,800.00. That is 600.00 of interest every year, or 50.00 a month, and the table shows it growing in a straight line.

Months are converted by dividing by 12, so 18 months at the same rate gives 10,000 x 0.06 x 1.5 = 900.00. Days are divided by 365, so 90 days comes to about 147.95.

The formula can be turned around when you know the interest and need another figure. The rate is I / (P x t), the time is I / (P x r) and the principal is I / (r x t). For instance, if 1,800 of interest was earned on 10,000 over 3 years, the rate must have been 1,800 / 30,000 = 6%. The calculator itself solves for the interest and total, so for the other cases rearrange by hand and use the tool to check the answer.

With compound interest, each period's interest is added to the balance and earns interest itself. The calculator shows this beside your result: the same 10,000 at 6% with yearly compounding would reach 11,910.16 after 3 years, which is 110.16 more than the simple figure. The gap is small over a short term and widens quickly as the rate or the number of years rises.

The reason is easy to see in year two. Simple interest stays at 600.00, but a compounding balance starts that year at 10,600, so it earns 636.00 instead. That extra 36.00 then earns interest of its own in later years, which is why a compounding balance curves upward while a simple one rises in a straight line.

If you want to see that effect in full, with regular deposits and different compounding frequencies, use the compound interest calculator. For a borrowing question where repayments reduce the balance each month, the loan EMI calculator is closer to how real loans behave.

Simple interest suits short personal loans between friends, some bonds that pay a fixed coupon, trade credit and late-payment charges, and almost every school exercise on the topic. Savings accounts, credit cards and most mortgages compound, so treat this result as a floor for those products rather than a forecast.

• Figures are before tax and fees, which can change what you actually receive or pay.
• The rate is assumed to stay fixed for the whole term.
• Day counts use a 365-day year, while some lenders use 360, so a contract may differ by a small amount.
• To turn a rate into an amount quickly, the percentage calculator helps, and the savings goal calculator shows what regular saving can reach.

Two slips cause most wrong answers. The first is typing the rate as a decimal: enter 6 for six per cent, not 0.06, or the interest will be a hundred times too small. The second is leaving Time in on Years when the term is in months, which turns 18 months into 18 years. Check the line under the result, which repeats the sum with your numbers, to confirm both.

The result is an estimate for general information and is not financial or tax advice.