Simple Interest Calculator
Calculate simple interest on savings or loans. Compare simple vs compound interest side by side, analyze loan costs, and see how day count conventions affect your returns.
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How to Use This Calculator
Calculate Interest tab
Enter your principal amount, annual interest rate, and time period (in years, months, or days). The calculator shows total interest earned or owed, total amount, and a per-year/month/day breakdown. Expand "More options" to change the day count convention for day-based calculations.
Simple vs Compound tab
Compare simple and compound interest side by side over the same principal, rate, and time. See a year-by-year table showing how compound interest pulls ahead — the difference grows exponentially. Adjust compounding frequency (monthly, quarterly, annual) under "More options."
Loan Interest tab
Compare a simple interest loan to a standard compound amortized loan. Enter loan amount, rate, and term. See which costs less and by how much. Add extra payments under "More options" to see how quickly you can pay off a simple interest loan.
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The Formula
Simple interest is calculated using one of the most straightforward formulas in finance:
Where:
I = Interest earned or owed
P = Principal (starting amount)
r = Annual interest rate (as a decimal)
t = Time in years
Total Amount = P + I
For months: t = months ÷ 12
For days (Actual/365): t = days ÷ 365
For days (30/360): t = days ÷ 360
Unlike compound interest, simple interest is linear — you earn the same dollar amount each period. There's no "interest on interest." This makes it easy to calculate but means your money grows more slowly over long periods.
For comparison, compound interest uses: A = P(1 + r/n)nt, where n is the compounding frequency. The difference between simple and compound grows dramatically over time.
Example
Emma — Lends $10,000 via Promissory Note
Emma lends $10,000 to a friend via a promissory note at 5% simple interest for 3 years. Here's what she can expect:
Simple Interest Calculation
What If It Were Compound Interest?
With simple interest, Emma earns $1,500 total. If it were compound interest (annual), she'd earn $1,576.25 — a difference of $76.25. Over 3 years the gap is small, but over 10+ years it grows exponentially.