Simple Interest Calculator

Our free online simple interest calculator is designed for quick loan checks and savings estimates. Enter a principal amount in the first field, choose the annual interest rate, and specify the time period in years. The tool works on mobile and desktop, so you can compare scenarios during meetings or while shopping for the best rates.

1. Enter the amount you plan to borrow or invest as the principal.
2. Type the annual percentage rate without converting it to a decimal.
3. Provide the duration in years or fractions of a year to reflect the exact term.

Click Calculate Interest to see the interest earned and the total payoff amount instantly. The reset button clears every field so you can model alternative rates or terms without refreshing the page.

Simple interest follows the classic finance rule Interest = Principal × Rate × Time / 100. The rate is an annual percentage and the time is measured in years, so a six-month loan would use 0.5 as the time value. Because the formula is linear, each period earns the same amount and the graph of the balance is a straight line.

Example: borrowing $5,000 at 6% for 2 years results in $5,000 × 6 × 2 / 100 = $600 in interest and a total repayment of $5,600. Use the calculator to double-check figures presented by lenders or to forecast how much interest a short-term savings certificate will return.

Simple interest calculations are common for personal loans, auto financing promotions, and treasury bills where the interest does not compound. The calculator helps you benchmark offers, evaluate penalty-free prepayment strategies, or plan interest-only payments before a balloon date.

Keep in mind that the simple interest model does not account for fees, taxes, or compounding schedules. For investments or loans that reinvest interest, switch to our compound interest calculator to capture exponential growth effects.