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Simple Interest

I=P r tI = P \, r \, t
$
$
sig figs

Worked example: $1000 at 5% for 3 periods → I = 150. Press Try an example to run it live, then adjust anything.

Enter your known values, leave one input blank, and solves for the missing one. Tap a variable’s symbol to see what it means, with a typical value. Change any unit and the answer follows.

Where Simple Interest fits

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See also

Compound Interest (Periodic): Both use principal amount and interest rate per period.Continuous Compounding: Both use principal amount and interest rate per period.Present Value: Both use interest rate per period and number of periods.Exponential Decay: Both use number of periods.Exponential Growth: Both use number of periods.
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Simple Interest explained

PrIt

Simple interest pays only on the original principal, never on past interest: a $2,000 loan at 6% per year for 3 years costs I = 2000 × 0.06 × 3 = $360, exactly $120 each year. Enter the rate as a decimal (6% → 0.06) and keep the rate and the time in the same period: a monthly rate with months, a yearly rate with years.

Short-term personal loans, car loans, and bonds' coupon payments often work this way. Compare with compound interest, where each period's interest joins the principal and the total pulls ahead of the simple-interest straight line.

Simple Interest formula

I=P r tI = P \, r \, t
Where
  • II= Interest earned ($)
  • PP= Principal ($)
  • rr= Interest rate per period (decimal)
  • tt= Number of periods
In this toolkit

Time value of money

4 formulasSimple interest, periodic and continuous compounding, and discounting a future amount back to what it is worth today.

Revised 31 October 2026
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formula.expert. (2026, October 31). Simple Interest Formula & Calculator. https://formula.expert/solvers/simple-interest

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