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Simple interest calculator
Interest calculated only on the original principal — no compounding.
—interest earned
—total amount
Simple Interest = Principal × Rate × Time
How it works
The calculator applies the textbook formula Interest = Principal × Rate × Time directly, with no compounding step. Choosing "Months" for the time unit doesn't change the formula — it converts your entered number into a fraction of a year (dividing by 12, since 1 month ≈ 0.0833333 years) before multiplying, because the rate you enter is always an annual percentage.
FAQ
- How is this different from compound interest?
- Simple interest is always calculated on the original principal only, so it grows in a straight line rather than curving upward — a compound interest calculator would apply the rate to the accumulated total (principal plus previously earned interest) each period instead.
- Why does entering 'Months' for time change so little compared to 'Years'?
- Selecting Months converts your entered time into a fraction of a year (dividing by 12) before applying the formula, since the annual rate is defined per year — entering 6 for months is treated as half a year, not six full years.
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