Simple Interest Calculator
Calculate simple interest or solve for principal, rate or time, then compare with compound interest
What do you want to find?
Simple interest earned
$1,500.00
$10,000.00 at 5.00% simple interest for 3 years grows to $11,500.00.
Simple interest
$1,500.00
Total amount
$11,500.00
Compound total (monthly)
$11,614.72
Extra from compounding
$114.72
compound minus simple
Growth Schedule
| Period | Simple Interest | Simple Total | Compound Interest | Compound Total |
|---|---|---|---|---|
| Yr 0 | $0.00 | $10,000.00 | $0.00 | $10,000.00 |
| Yr 1 | $500.00 | $10,500.00 | $511.62 | $10,511.62 |
| Yr 2 | $1,000.00 | $11,000.00 | $1,049.41 | $11,049.41 |
| Yr 3 | $1,500.00 | $11,500.00 | $1,614.72 | $11,614.72 |
About Simple Interest
Simple interest is charged or earned only on the original principal. The interest never earns interest of its own, so the balance grows in a straight line. Compound interest adds each period's interest to the balance, so growth speeds up over time. The gap between the two widens the longer the money stays invested.
The Formulas
I = P × r × t
A = P × (1 + r × t)
r = (A ÷ P − 1) ÷ t
t = (A ÷ P − 1) ÷ r
P = principal, r = annual rate, t = years, I = interest, A = final amount
Good to Know
- •Many auto loans and US federal student loans charge simple interest, so extra payments cut interest right away
- •Check whether a lender uses a 360-day or 365-day year; the 360-day convention charges slightly more
- •Simple interest favors borrowers, while compound interest favors savers
- •When comparing savings accounts, look at APY, which includes compounding
- •For periods under a year, convert months or days into a fraction of a year