Simple Interest Calculator
Calculate simple interest using the formula I = P x R x T (Principal x Rate x Time).
Total Interest
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Total Amount (P + I)
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Monthly Interest
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Daily Interest
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Simple Interest Formula
I = P x R x T
- I = Interest earned
- P = Principal (initial amount)
- R = Annual interest rate (as decimal)
- T = Time in years
Simple vs Compound Interest
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Interest on | Principal only | Principal + accumulated interest |
| Growth | Linear | Exponential |
| Common use | Short-term loans, bonds | Savings, investments, mortgages |
Frequently Asked Questions
When is simple interest used?
Simple interest is commonly used for short-term loans, auto loans, some personal loans, and certain bonds. It is straightforward and results in lower total interest than compound interest over the same period.