How to use Simple Interest Calculator
- Enter the original principal and the annual interest rate as a percentage.
- Enter the time in years. You can use a decimal such as 1.5 for a year and a half.
- The interest amount, total and formula update as you change the fields. Read them together.
Example: Simple Interest Calculator
Find simple interest on 1,000 at 5% a year for three years.
Options
- Annual rate
- Enter the stated yearly percentage. The calculator divides it by 100 before multiplying by principal and years.
- Time in years
- A decimal year is used directly in the formula; the page does not count calendar days or determine a lender's day-count method.
Supported inputs and limits
Where your input is processed
This tool processes your input in this browser. Your text and files are not uploaded to UseFreeTools. Check this tool's limits for anything it may save on your device.
What this formula assumes
Checked 2026-09-28. The Consumer Financial Protection Bureau uses interest = principal × rate × time as a teaching example and notes that actual payments can vary. This page accepts a time in decimal years and does not infer calendar dates or a loan's day-count convention. The total shown is original principal plus this simplified interest amount.
Questions about Simple Interest Calculator
How is simple interest calculated?
Multiply the original principal by the annual rate as a decimal and by the number of years. For 1,000 at 5% for three years, interest is 150.00.
How does this differ from compound interest?
Simple interest uses the original principal throughout. Compound interest can add earned interest to the balance, so later interest can be calculated on a larger amount.
Can I use this to predict my loan payments?
No. This page does not reduce the balance as payments are made or apply a lender's daily or monthly accrual method. Use your agreement or lender's schedule for payment figures.