Simple Interest Calculator

Calculate simple interest based on the annual percentage rate (APR), principal amount, and time period (days, months, years). Calculator shows total accrued value, after the simple interest is added to initital principal.


Amount to which to apply simple compounding
%
Annual Percentage Rate (APR) - for example, 2%, 3.5%

Entry Fields - Simple Interest

Principal - This is the starting amount of the deposit, or loan.

Interest Rate - Annual Percentage Rate (APR)

Time Period - Enter in days, months or years. Use the drop-down to select what the time period you enter represents: days, months or years.

What is Simple Interest?

Simple interest is calculated only on the principal amount of a loan or on a savings account.

Simple interest, when available, can be beneficial to a borrower, if interest is paid to the lender on time to avoid penalty fees.

For deposit accounts, such as a savings account, simple interest lacks the earnings potential of compounded interest, which applies to both the principal and the compounded interest applied to it.

How is Simple Interest Calculated?

The formula used to calculate simple interest is:

Formula: A = P (1 + rt)

where:

  • A = Accrued Amount: Principal + Calculated Simple Interest

  • P = Principal

  • r = APR (annual percentage rate), expressed as a decimal, which is APR/100

  • t = time period in years, months, days

Related: CD Compounding Calculator