Simple Interest Calculator
Calculate simple interest on your principal amount. Enter your principal, annual interest rate, and time period to see total interest earned.
Enter Details
Results
Total Interest Earned
$1,500
Total Amount
$11,500
Monthly Interest
$41.67
How Simple Interest Works
Our simple interest calculator uses the formula I = P x R x T to calculate interest on a principal amount over a given time period.
Formula Breakdown
- P (Principal) - The initial amount of money
- R (Rate) - Annual interest rate as a decimal
- T (Time) - Time period in years
Simple Interest FAQ
What is simple interest?▼
Simple interest is calculated only on the original principal amount. The formula is I = P x R x T, where P is principal, R is annual rate, and T is time in years.
How is simple interest different from compound interest?▼
Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus accumulated interest. Compound interest grows faster over time.
When is simple interest used?▼
Simple interest is commonly used for short-term loans, car loans, and some personal loans. It is also used for savings bonds and certificates of deposit.