Simple interest calculator
Calculate non-compounded interest from principal, annual rate and duration.
This choice applies to every calculator; amounts are not converted.
Interest = principal × rate × duration
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How does this tool work?
Simple interest is calculated only on the original principal, so previously earned interest does not itself earn interest.
The calculator multiplies the original principal by the annual rate expressed as a decimal and then by the duration in years. That amount is the total interest for the period and is added to the principal to produce the final balance. Unlike compound interest, the calculation base never grows over time, so the increase is linear and the result remains straightforward to verify by hand.
How to use this tool
Enter the principal
Provide the starting amount on which interest will be calculated.
Add the annual rate
Enter the yearly percentage applied to the original principal throughout the period.
Set the duration
Enter the number of years to calculate accumulated interest and the final amount.
Good to know
Simple or compound: the gap grows
At 3% for 2 years, €10,000 earns €600 in simple interest and €609 compounded. Over 20 years the gap exceeds €2,000: simple interest suits short terms or investments that pay out interest instead of reinvesting it.
Years and day counts
The tool works in years: for 6 months, enter 0.5. In practice, banks and contracts often count days with a specific convention (actual days over 360 or 365); check the contract for an amount to the cent.
Simple interest formula
Interest is calculated each year on the initial principal only: it does not earn interest itself.
Interest
I = C × i × n
The annual rate entered as a percentage is divided by 100.
Final amount
Cₙ = C + I = C × (1 + i × n)
Initial principal plus interest.
- I
- total interest
- C
- initial principal
- i
- annual rate as a decimal
- n
- duration in years, decimals allowed
- Cₙ
- final amount
Use cases
Short-term loan
Estimate financing cost when interest continues to be calculated only from the original borrowed amount.
Simple-interest investment
Project an investment where earned interest is paid out instead of being reinvested.
Learning and verification
Check a finance exercise with a transparent formula that can easily be reproduced manually.
Examples
€10,000 at 3% for 2 years
10,000 × 3% × 2 = €600: interest is not added to the principal, so each year earns €300.
Input
Principal: €10,000; Annual rate: 3%; Duration: 2 yearsResult
Interest: €600; Final amount: €10,600; Interest per year: €300Tips and best practices
- Make sure the entered rate is annual.
- Use a decimal duration when the period is not a whole number of years.
- Use the compound-interest calculator when interest is reinvested.
Sources and references
Frequently asked questions
How is it different from compound interest?
Compound interest is periodically added to the balance and then earns additional interest. Simple interest always uses only the original principal as its calculation base.
Can duration be decimal?
Yes. A duration such as 1.5 years is valid and is useful for representing partial years when the entered rate is annual.
Is the rate annual?
Yes. The tool treats the entered percentage as an annual rate, so monthly or quarterly rates should be converted before use.
How do I calculate simple interest over 18 months?
First convert the duration into years: 18 months = 1.5 years. For €5,000 at 4% a year, interest is 5,000 × 0.04 × 1.5 = €300, giving a final amount of €5,300.
How do I find the rate from the interest earned?
Divide the interest by the principal multiplied by the duration in years, then multiply by 100. Interest of €600 on €10,000 over 2 years corresponds to 600 ÷ (10,000 × 2) × 100 = 3% per year.
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