Simple Interest Calculator
Simple Interest Terms
Calculation Results
| Interest Earned | — |
|---|---|
| Total Ending Balance | — |
What is Simple Interest?
**Simple Interest** is a quick and easy method of calculating the interest charge on a loan or the growth of an investment. Unlike compound interest, simple interest is calculated solely on the initial principal amount.
The Simple Interest Formula
Simple interest is calculated using the following formula:
Interest (I) = P × r × t
Where:
- P is the Principal (starting amount)
- r is the annual interest rate (as a decimal)
- t is the time period in years
Disclaimer. This calculator is for informational purposes only. Simple interest is rarely used in modern retail finance; most banks, credit unions, and credit card issuers use compound interest.