Skip to main content
Financial Planning

Simple Interest Calculator

Calculate simple interest on a principal for years, months or days, including Actual/365 and Actual/360 day-count conventions.

Your inputs

Results

Interest

$600.00

Total amount (principal + interest)
$5,600.00
Time in years
3

✓Exact calculation — rounded only for display

Show calculation steps
  1. I = P × r × t = 5000 × 0.04 × 3 = 600

Inputs are never added to links for financial, salary or health calculators.

What this calculator does

Simple interest is charged or earned only on the original principal, never on accumulated interest. It is used for many short-term loans, some bonds and promissory notes, and for quick estimates.

Formula and method

I = P × r × t, Total = P + I For days, t = days ÷ 365 (Actual/365) or days ÷ 360 (Actual/360).
P
principal
r
annual rate as a decimal
t
time in years

Worked example

Calculated by this tool with its default inputs:

Inputs

  • Principal: 5000 (any currency)
  • Annual interest rate: 4 %
  • Time: 3
  • Time unit: Years

Results

  • Interest: 600
  • Total amount (principal + interest): 5,600
  • Time in years: 3

How to read the results

The interest grows in a straight line with time. Doubling the time doubles the interest — unlike compound interest, which accelerates.

Assumptions and limitations

  • Actual/360 produces slightly more interest than Actual/365 for the same number of days; check which convention your contract uses.
  • Does not include fees or penalties.

Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.

Questions

When is simple interest used instead of compound interest?

Commonly for short-term instruments, auto loans that calculate interest on the outstanding principal each period, and many money-market and bank deposit calculations over a single term.

Methodology and verification

Result type
Exact mathematical calculation (rounded only for display)
Formula version
1.0
Automated verification
5 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
Editorial review
Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.

Privacy

Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Because this calculator can involve personal financial or health details, your inputs are never added to share links or saved to history. Privacy policy