Simple Interest Calculator
Simple interest is used for many short-term loans and some bonds. It is calculated only on the original principal, so the interest does not compound.
Simple interest
$750.00
Total amount
$5,750.00
Interest per year
$250.00
Interest per month
$20.83
How this was worked out
- Step 1I = P × R × T ÷ 100
- Step 2I = 5,000 × 5 × 3 ÷ 100 = $750.00
- Step 3Total = 5,000 + 750 = $5,750.00
Formula
I = P × R × T ÷ 100 A = P + I
Example
Input
$5,000 at 5% for 3 years
Result
$750 interest, $5,750 total
Frequently asked questions
It is common for short-term personal loans, some car loans, and certain bonds and treasury products.
Because you never earn interest on the interest — only on the original principal.
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