Simple Interest Calculator
Calculate simple interest and final amount when interest is applied only to the original principal for a fixed number of years.
Calculate simple interest
How this tool works
Simple interest grows in a straight line because every period uses the starting principal rather than an increasing balance. The calculator reports both interest alone and the final principal-plus-interest amount for a fixed-rate educational scenario.
Simple interest I equals principal P multiplied by annual decimal rate r and time t in years. Final amount equals the original principal plus I.
How to use it
- Enter the original principal amount.
- Enter a non-negative annual percentage rate and duration in years.
- Read the interest charge and the final amount after adding principal.
Worked examples
Three-year simple interest
- Input
- 10,000 principal at 5% for 3 years
- Output
- 1,500 interest
Five percent of the original principal is 500 per year. Simple interest repeats that unchanged amount for three years, resulting in 1,500.
Short classroom example
- Input
- 2,000 principal at 4% for 2 years
- Output
- 160 interest
Multiplying 2,000 by 0.04 and then by two years gives 160. The final amount is therefore 2,160 without compounding.
Limitations
- Many real loans use compounding, fees, or day-count conventions not represented here.
- The result is an estimate and not a contractual repayment quotation.