Simple Interest Calculator
Calculate the simple, non-compounding interest earned or paid on a principal balance over custom years, months, or day-based holding periods.
Treasury Bill (180 Days)
Short-term Loan (9 Months)
Promissory Note (5 Years)
Calculate Simple Interest
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Total Simple Interest Earned
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Enter parameters on the left to calculate simple interest.
*Interest does not compound or add back to the principal balance.
Total Value (Principal + Interest):
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Principal Amount:
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Interest Weight proportion:
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Principal vs Simple Interest worth
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Understanding Simple Interest
Simple Interest is a quick and easy method of calculating the interest charge on a loan or investment principal. Unlike compound interest (which calculates interest on top of accumulated interest), simple interest is calculated solely as a flat percentage of the original principal amount.
The Simple Interest Formulas
Interest (I) = P × r × t
The total accumulated value (A) is the sum of the principal and interest earned:
Total Value (A) = P × ( 1 + r × t )
Where:
- P = Principal amount deposited or borrowed.
- r = Annual interest rate (decimal format, e.g. 5% = 0.05).
- t = Time horizon expressed in years (adjusted by 1/12 for months, and 1/365 for days).