Finance
Calculate interest earned or charged only on the original principal.
Results update as you type. No calculate button. All calculations run locally in your browser.
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| Amount | |
|---|---|
| Principal | — |
| Total interest | — |
| Ending balance | — |
Bars are scaled to the ending balance. With simple interest the interest slice grows in equal yearly steps, unlike compound interest where it accelerates.
| Year | Interest so far | Balance |
|---|
Each year adds the same interest amount, because interest is always charged on the original principal only.
Interest = principal × annual rate × years. Ending balance = principal + interest. Yearly interest = principal × annual rate.
Principal $10,000 at 4% for 3 years: yearly interest is $10,000 × 4% = $400, total interest is $400 × 3 = $1,200, and the ending balance is $11,200.
Simple interest never charges interest on interest, which is why it is lower than compound interest over the same period. Loans and deposits that compound, or that charge fees, need a different calculator. Partial years are allowed and scale the interest proportionally.
Simple interest is always calculated on the original principal. Compound interest is calculated on principal plus previously earned interest, so it grows faster over time.
For some short-term loans, car loans with simple-interest terms, and textbook interest problems. Most savings accounts and mortgages compound instead.
Yes, as long as the principal and rate do not change. That is the defining feature of simple interest.
Enter years as a fraction (for example 2.5). Interest scales proportionally with time.
On a pure simple-interest loan with no fees and no interim payments, yes. If you make payments during the term, the picture changes.
Results are estimates only and do not constitute professional advice.