Enter your principal amount, annual interest rate, and loan term to calculate your simple interest. The Simple Interest Calculator returns your total interest earned or owed, the end balance, and a year-by-year breakdown schedule showing how your balance grows over time.
End Balance
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Total Interest
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Interest Per Year
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Term (Years)
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Simple interest is a method of calculating interest where the charge is based solely on the original principal amount. Unlike compound interest, it does not accumulate on previously earned interest. The formula is: Interest = Principal × Rate × Time.
Simple interest is calculated using the formula I = P × R × T, where P is the principal, R is the annual interest rate (as a decimal), and T is the time in years. For example, $20,000 at 3% for 10 years yields $6,000 in interest, giving an end balance of $26,000.
Simple interest is commonly used for short-term personal loans, auto loans, some student loans, and certain savings accounts or certificates of deposit. It is also used in U.S. Treasury bills and some types of bonds.
For borrowers, simple interest is generally better because you only pay interest on the original principal, not on accumulated interest. Compound interest can significantly increase the total cost of a loan over time, especially for longer terms.
For investors, compound interest is typically more advantageous because it generates returns on both the principal and previously earned interest, leading to exponential growth over time. Simple interest grows linearly, so compound interest yields a larger end balance over long periods.
A good loan rate depends on the loan type, your credit score, and market conditions. For personal loans, rates between 6% and 12% are generally considered competitive. Rates below the national average for your loan type are typically favorable.
Yes. With simple interest, a longer term directly increases the total interest paid because interest accrues on the principal for a greater period. Shorter terms reduce total interest but may mean higher periodic payments.
Yes. Select 'Per Month' under Rate Period to enter a monthly interest rate, and choose 'Months' under Term Period to set the duration in months. The calculator will automatically convert and compute your total interest and end balance accordingly.