About the Simple Interest Calculator
Simple interest is calculated only on the original principal, using the formula SI = P × R × T ÷ 100. Enter the principal, annual rate and time period, and this calculator shows the interest earned and the total amount payable or receivable.
When simple interest applies
Simple interest is used for some short-term loans and deposits. Most investments and bank products, however, use compound interest, which grows faster because it earns interest on interest.
Simple Interest Calculator — frequently asked questions
What is the simple interest formula?
SI = P × R × T ÷ 100, where P is principal, R the annual rate (%) and T the time in years.
What is the difference from compound interest?
Simple interest is charged only on the principal; compound interest is charged on the principal plus accumulated interest, so it grows faster over time.