Simple Interest Calculator
Calculate simple interest, total amount, and interest earnings for loans, investments, and financial planning. Perfect for understanding basic interest calculations and comparing financial options.
Select Calculation Type
Simple Interest Results
Primary Result
Simple Interest
Total Amount
Interest Rate
Interest Calculation Breakdown
How the Simple Interest Calculator Works
Choose Calculation Type
Select what you want to calculate: simple interest earned, total amount, required principal, or needed interest rate for your financial goals.
Enter Financial Details
Input the known values such as principal amount, interest rate, and time period. The calculator uses the standard simple interest formula.
View Detailed Results
Get instant calculations with complete breakdown showing principal, interest earned, total amount, and the formula used for transparency.
Apply to Financial Planning
Use the results for loan planning, investment decisions, savings goals, and comparing different financial options.
Frequently Asked Questions
Simple interest is calculated only on the principal amount using the formula: I = P × R × T, where I is interest, P is principal, R is annual interest rate (as decimal), and T is time in years. Unlike compound interest, it doesn't earn interest on previously earned interest.
Simple interest is calculated only on the original principal amount, while compound interest is calculated on the principal plus any previously earned interest. Compound interest grows faster over time, making it more beneficial for investments but more expensive for loans.
Simple interest is commonly used for short-term loans, car loans, some personal loans, and basic savings accounts. It's also used in educational examples to teach interest concepts and for quick interest calculations in business scenarios.
To convert a monthly interest rate to annual: multiply by 12. To convert annual to monthly: divide by 12. For example, 1% monthly = 12% annually. Always ensure you're using the correct time units in your calculations (years for annual rates).
Yes, this calculator is useful for basic investment planning, especially for investments that pay simple interest like some bonds or CDs. However, for most investments that compound returns, use a compound interest calculator for more accurate projections.