Simple Interest Calculator
Interest with no compounding — useful for short-term loans and quick estimates.
Estimates for educational purposes only — not financial, tax, or investment advice.
Simple vs compound interest
Simple interest is calculated only on the original principal: interest = principal × rate × time. It never earns interest on interest, which makes it easy to compute and common for short-term loans, car loans, and some bonds. For savings and most long-term debt, compound interest applies instead and grows faster.
When you'll see it
Simple interest shows up on many auto loans and short personal loans, where the payoff is quick enough that compounding barely matters. For anything long-term, compare it with our compound interest tool to see how different the two really are over years.
Frequently asked questions
What's the formula?
Interest = Principal × Rate × Time, where rate is the annual rate as a decimal and time is in years.
Why is compound interest usually higher?
Because compound interest also earns interest on previously earned interest, so it accelerates over time while simple interest stays flat.