Simple interest calculator
Simple interest is charged only on the original principal. It still appears in short-term notes, some consumer credit and most school exercises.
USD
%
Interest$750.00
- Principal plus interest
- $5,750.00
- Principal
- $5,000.00
- Interest per year
- $250.00
- Duration in years
- 3.000 years
The formula
I = P · r · t, with r the annual rate as a decimal and t the time in years. Days are divided by 365.
Worked example
5,000 at 5% for 3 years gives I = 5,000 × 0.05 × 3 = 750, so 5,750 is repaid.
How to use it
- 1Enter the rate as an annual figure even for short periods.
- 2Switch the duration unit rather than converting by hand.
- 3For anything that compounds, use the compound interest calculator instead.
Questions people ask
When is interest genuinely simple?
Bridging loans, some car finance and many promissory notes. If the statement shows interest added to the balance, it is compound, not simple.
Why 365 days and not 360?
365 is the common convention for consumer calculations. Money markets often use 360, which makes interest slightly higher for the same rate.
Last reviewed: 2026-10-20