Simple Interest Calculator
Formula
Interest = Principal × Rate × Time
Simple interest is calculated only on the original principal, not on accumulated interest. Unlike compound interest, the interest earned each year stays the same.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus all accumulated interest, so it grows faster.
Where is simple interest used?
Car loans, short-term personal loans, and some bonds use simple interest. Savings accounts and mortgages typically use compound interest.