How to use Simple Interest Calculator
- Enter the starting amount.
- Enter the annual rate as a percentage and the time in years; 0.5 means half a year.
- Read the interest earned and the starting amount plus interest.
A closer look
Simple interest is calculated only on the starting amount: interest = principal × annual rate ÷ 100 × years. A starting amount of 1,000 at 5% for 2 years earns 100, giving a total of 1,100. Unlike compound interest, previous interest does not earn more interest. This model assumes the principal stays unchanged throughout the chosen time.
A practical example
A principal of 1,000 at 5% per year earns 100 over two years, for a total of 1,100. Earlier interest does not earn additional interest in this model.
A useful tip
A real account or loan may use daily balances or a different day-count convention. This calculator uses the year length you enter and excludes fees and taxes.
Good questions. Simple answers.
Can I enter part of a year?
Yes. Use decimals: 0.5 is six months and 1.25 is one year and three months in this year-based model.
Can the interest rate be zero?
Yes. Zero rate or zero time gives zero interest and leaves the starting amount unchanged.
Explore all calculators for related tasks and category-specific guidance, or read how Toolzafi handles your data.