Simple Interest Calculator
Calculate simple interest on loans and investments with our straightforward calculator.
Simple Interest Calculator
Calculate simple interest on your investment or loan
Simple Interest Results
Interest Earned
$2,500.00
Total Amount
$12,500.00
Principal:$10,000
Interest Rate:5.00%
Time Period:5 years
Interest Earned:$2,500.00
Total Amount:$12,500.00
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What is Simple Interest?
Simple interest is interest calculated only on the principal amount. Unlike compound interest, simple interest does not earn interest on accumulated interest. It's easier to calculate and commonly used for short-term loans and some savings accounts.
Simple Interest Formula
I = P × R × T
- I = Interest earned
- P = Principal (initial amount)
- R = Interest rate (as decimal)
- T = Time (in years)
Example Calculation
$10,000 invested at 5% for 5 years:
Principal: $10,000
Rate: 5%
Time: 5 years
Interest: $2,500
Total: $12,500
Simple vs Compound Interest
| Aspect | Simple Interest | Compound Interest |
|---|---|---|
| Calculation | On principal only | On principal + accumulated interest |
| Growth | Linear | Exponential |
| Returns | Lower | Higher |