Simple Interest Calculator

I = Prt, with what compounding would have added.

I = Prt, with what compounding would have added. Simple interest is charged on the principal only, never on interest already earned.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Principal

Annual rate

Years

Simple interest

$500.00

Total $1,500.00

Principal$1,000.00

Interest$500.00

Total$1,500.00

If compounded annually$1,628.89

Compounding would add$128.89

Simple interest is I = Prt — interest on the principal only, never on interest already earned. The comparison row is the point: over 10 years at 5.00%, compounding would have added a further $128.89. Simple interest is now rare outside short-term and some auto loans; almost everything else compounds.

How the Simple Interest Calculator works

Simple interest is charged on the principal only, never on interest already earned. The comparison against compound interest is the point of this page: over a long enough term the gap becomes the larger number.

Also known as: simple interest formula · i = prt calculator · simple vs compound interest · how to calculate simple interest

Where to go next

The Simple Interest question rarely arrives on its own. These are the ones that usually come with it:

Compound Interest Calculator — See how savings grow with regular contributions.
Future Value Calculator — A lump sum plus contributions, in nominal and real terms.
Rule of 72 Calculator — The mental shortcut, checked against the exact answer.
Loan & EMI Calculator — Monthly payment, total interest, and a full amortization schedule.

Sources

Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.

Frequently asked questions

What is the simple interest formula?

I = Prt — principal times rate times time. £1,000 at 5% for 10 years earns £500.

How is it different from compound interest?

Compound interest earns interest on interest. The same £1,000 at 5% compounded annually reaches £1,628.89 rather than £1,500 — an extra £128.89 over ten years, and the gap widens as the term grows.

Where is simple interest still used?

Short-term and some auto loans, certain bonds, and many informal arrangements. Almost everything long-term compounds.

Is simple interest better for a borrower?

Yes, at the same rate — you never pay interest on interest. Comparing a simple rate directly against a compound one understates the compound cost.

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