What is a Simple Interest Calculator?
Simple interest is charged on the original principal only, never on the interest already earned. That makes it the easy case, and the one most short term loans and some fixed deposits still use.
Enter the principal, the rate and the number of years. The tool returns the interest, the total amount, and how much more the same money would have earned if it compounded yearly.
The comparison is the point. Over one or two years the gap is small enough to ignore. Over ten it is large, and over twenty it dominates. Any time someone quotes you a rate without saying whether it compounds, that gap is the thing they have left out.
Frequently asked questions
What is the simple interest formula?
Principal multiplied by rate multiplied by time, divided by one hundred. The interest is the same every year because it is always calculated on the original principal.
When is simple interest actually used?
Short term personal and vehicle loans, some deposits, and most informal lending. Longer instruments almost always compound, so check which one a quoted rate refers to.
How different is compound interest?
At ten percent over ten years, simple interest returns exactly the principal again, while yearly compounding returns about one and a half times it. The tool shows the gap for the figures you enter.
Is anything sent to a server?
No. The arithmetic runs in your browser.