Simple Interest Calculator (Years, Months or Days)
Simple interest and the total on a principal for any number of years, months or days, with the interest per year, month and day.
Inputs
- Principal$10,000(74%)
- Interest$3,500(26%)
- Simple interest
- $3,500
- Principal
- $10,000
- Time (T)
- 5 years
- Working
- I = P × 7% × 5 = P × 0.35
- Interest per year
- $700
- Interest per month
- $58.33
- Interest per day (÷ 365)
- $1.92
Use this calculator on your own site
Free embed
- Two lines of HTML, unlimited views
- Shows a small CalculateEveryday bar, with a credit link under the calculator
What each Simple Interest input means
- Principal
- The amount borrowed or deposited. Simple interest is always worked out on this figure alone.
- Annual rate
- The annual rate. If you are quoted a monthly rate, multiply it by 12.
- Time
- How long, in the unit chosen below. Fractions of a year are fine in days or months.
- Time is in
- Years, months (divided by 12) or days (divided by 365).
Simple Interest formula
I = P × r × t · Total = P + I · t in years (months ÷ 12, days ÷ 365)
Simple interest is charged or earned only on the original principal, never on interest already accrued. OpenStax's Contemporary Mathematics writes it as I = Prt: P is the principal, r the annual rate as a decimal and t the time in years. Time given in months is divided by 12, and time in days by 365 — the 'actual/365' convention; some lenders use a 360-day year, which makes a short loan slightly dearer. Because the base never grows, simple interest rises in a straight line: the same amount every year, every month and, on a 365-day year, every day, and the page shows all three. The total owed or received is the principal plus that interest. Simple interest is common for short-term loans, some car loans that accrue interest daily on the balance, Treasury bills quoted on a discount basis, and informal loans between people; savings accounts and most investments compound instead, and the compound interest calculator shows the difference.
Simple Interest worked example
$10,000 at 7% simple interest for 5 years earns $3,500 in interest ($700 every year, flat), for a total of $13,500. At 7% compounded monthly over the same period you'd get about $14,176 — the gap is modest over five years but grows with longer terms.
More Simple Interest examples
A $2,500 short-term loan at 9% for 90 days: t = 90 ÷ 365 = 0.2466 years, so the interest is about $55 and the total to repay $2,555.
$20,000 at 6% for 18 months: t = 18 ÷ 12 = 1.5 years, so I = 20,000 × 0.06 × 1.5 = $1,800, a total of $21,800 — $100 of interest each month.
Where the Simple Interest calculator can give the wrong answer
- Days are divided by 365. Some lenders and money-market instruments use a 360-day year ('actual/360'), which gives about 1.4% more interest for the same number of days.
- Fractional years are accepted and scale t in a straight line, which is exactly how simple interest works.
- A 0% rate returns the principal with zero interest, valid for interest-free loans.
- Simple interest understates growth whenever interest would normally be reinvested — use the compound interest calculator when the product actually compounds.
- Loans with regular repayments charge interest on the falling balance, not the original principal; for those, use the EMI or amortization calculator.
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Simple Interest reference table
| Years | Simple interest total | Compounded monthly | Gap |
|---|---|---|---|
| 1 | 10,700 | 10,723 | 23 |
| 5 | 13,500 | 14,176 | 676 |
| 10 | 17,000 | 20,097 | 3,097 |
| 20 | 24,000 | 40,387 | 16,387 |
Simple Interest FAQ
- Multiply principal, annual rate and time in years: I = P × r × t. $4,000 at 5% for 3 years is 4,000 × 0.05 × 3 = $600, so the total is $4,600. For months divide by 12; for days divide by 365.
- Use t = days ÷ 365. $10,000 at 8% for 45 days: 10,000 × 0.08 × 45 ÷ 365 = $98.63. Choose 'Days' above and enter 45.
- Short-term personal loans, some auto loans that accrue interest daily on the outstanding balance, loans between family and friends, and some promotional financing. Treasury bills and commercial paper are quoted with discount and simple-interest conventions too.
- Simple interest is paid only on the principal; compound interest is also paid on interest already added. At 7%, 10,000 earns 7,000 of simple interest in 10 years but about 10,097 compounded monthly, and the gap keeps widening.
- Many US auto loans are sold as 'simple interest' loans: interest accrues each day on the principal still owed, and each payment covers that interest first. Paid on time, they repay exactly like the schedule from the car-loan calculator. Paying a few days early saves a little interest and paying late costs a little, because the days in between are charged.
- Rearrange I = Prt: r = I ÷ (P × t), and t = I ÷ (P × r). If 5,000 earned 450 over 2 years, the rate was 450 ÷ (5,000 × 2) = 4.5% a year.