How Does This Calculator Work?
Simple interest is calculated as principal × rate × time, where rate is expressed as a decimal (percentage ÷ 100) and time is in years.
Simple interest (as opposed to compound interest) is calculated only on the original principal, not on any interest already accrued — common for certain loans and short-term calculations.
Example Calculation
Personal Loan Example
$5,000 principal, 5% annual rate, 3 years.
5000×0.05×3 = $750 interest.
Tips
For interest that compounds over time (as with most savings accounts and many loans), the result will differ from a compound interest calculation — this calculator is for simple (non-compounding) interest only.