Simple Interest Calculator
A $1,000 deposit at a 5% simple interest rate for 3 years earns $150 in interest, for a $1,150 total. This simple interest calculator finds the interest and final balance from your principal, annual rate, and time in years, without any compounding.
Quick answer
Simple interest is charged only on the original principal, never on interest already earned.
What this tells you
- •Simple interest is charged only on the original principal, never on interest already earned.
- •The interest amount is the same in every year because the balance it is based on does not change.
- •Total amount is the principal plus the total interest over the full term.
How to Use
- 1Enter the principal, the starting amount you deposit or borrow.
- 2Enter the annual interest rate as a percent, such as 5 for 5%.
- 3Enter the time in years, using decimals for partial years like 1.5.
- 4Calculate to see total interest, final balance, and the monthly equivalent.
How It Works
Formula
Simple Interest = Principal x Rate x TimeRate is the annual percentage written as a decimal, so 5% becomes 0.05, and time is measured in years. The result is the interest only, so add it to the principal for the final balance.
Calculation note: values are processed in the order shown above, using the current input units.
Worked Examples
Three year deposit
1000 x 0.05 x 3 = 150 in interest, plus the original 1000 gives 1150.
Two year loan
5000 x 0.04 x 2 = 400 in interest, plus the original 5000 gives 5400.
Simple interest on $1,000
Total interest earned on a $1,000 principal at common annual rates and terms.
| Annual rate | 1 year | 3 years | 5 years |
|---|---|---|---|
| 2% | $20 | $60 | $100 |
| 3% | $30 | $90 | $150 |
| 4% | $40 | $120 | $200 |
| 5% | $50 | $150 | $250 |
| 6% | $60 | $180 | $300 |
| 8% | $80 | $240 | $400 |
Interest scales directly with rate and time, so doubling either one doubles the interest.
Common mistakes
- Entering the rate as a decimal in the percent field, such as 0.05 instead of 5.
- Confusing simple interest with compound interest, which also pays interest on prior interest.
- Mismatching the rate and time units, such as a yearly rate paired with a term entered in months.