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Simple Interest Calculator

Calculate exactly how much interest you will pay or earn over a specific time period using a flat, non-compounding rate.

Basic Interest
Enter your principal amount, rate, and duration.
$
%
Total Interest
$2,500
Principal Amount
$10,000
Starting balance
Total Final Value
$12,500
Principal + Interest
Table of Contents
Understanding Simple Interest

Simple Interest is a quick method of calculating the interest charge on a loan. Unlike compound interest, simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

Simple vs Compound Interest

The primary difference is whether you earn interest on your interest.

  • Simple Interest: The interest is calculated only on the original principal amount. If you invest $100 at 5% simple interest, you will earn exactly $5 every single year, forever.
  • Compound Interest: The interest is calculated on the original principal and the accumulated interest. If you invest $100 at 5% compound interest, you earn $5 the first year, but the next year you earn 5% on $105, which is $5.25. Over decades, this difference is astronomical.
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