Simple interest calculator
Calculate simple interest and compare it with interest that compounds yearly.
How it works
Simple interest equals principal times the annual rate times the number of years. It never earns interest on earlier interest, unlike compound interest.
Check whether your loan or account uses simple or compound interest. Most savings accounts and cards compound.
Example
With the sample inputs shown above (Principal ($) = 10000; Annual rate (%) = 5; Years = 3), the calculator returns: Simple interest: $1,500 (Over 3 years); Total amount: $11,500; If compounded yearly: $1,576 (Interest alone).
Things to know
Simple interest is common on some short-term loans and bonds. Check your agreement to see whether interest is simple or compounded. The comparison figure shows how much more interest compounding adds over the same period.