The simple interest calculator below, from The Finance Reveal, shows the interest on a principal at a flat annual rate: enter the amount, the rate, and the number of years, and it returns the interest charged and the total you would repay, with a clear split between principal and interest.

What simple interest is

Simple interest is charged only on the original principal, never on interest that has already built up. That makes it easy to work out: the interest for one year is the principal times the rate, and over several years it simply multiplies by the number of years. It is the opposite of compound interest, where interest earns interest, which is why the two can produce very different totals over long periods.

How to use the result

Use it to see the true cost of a flat-rate loan or the return on a simple-interest product before you commit. If you are comparing it against an account or loan that compounds, run the same figures through our compound interest calculator to see the gap, the difference our guide to compound growth explains.

Frequently asked questions

What is the simple interest formula?

Interest equals principal times rate times time. The rate is the annual percentage as a decimal, and time is measured in years. The calculator does this for you and adds the interest to the principal to show the total repayable.

How is simple interest different from compound interest?

Simple interest is charged only on the original principal, while compound interest is charged on the principal plus any interest already added. Over short periods the difference is small, but over many years compounding pulls far ahead.

Where is simple interest used?

It appears on some short-term loans, certain bonds, and a few savings products. Many everyday products compound instead, so always check which method applies before comparing rates.

Related calculators and guides

Compare with the compound interest calculator, project a target with the savings goal calculator, and read more in our Saving Money section. Every tool lives in Financial Tools.