Simple interest calculator
Enter principal, annual rate and time to get the interest and total.
Simple interest calculator
Work out simple interest on a loan or deposit and the final total. Simple interest is charged only on the original principal, never on accumulated interest, which makes it easy to predict.
Formula
Interest = Principal × rate × time (I = P × r × t), where the rate is the annual percentage as a decimal and time is in years. The total you repay or receive is P + I. Example: £1,000 at 5% for 3 years = 1,000 × 0.05 × 3 = £150 interest, £1,150 total.
Simple vs compound interest
Simple interest stays flat each year. Compound interest adds each period’s interest to the balance, so it grows faster over time. Short car loans and some bonds use simple interest; savings and most investments compound.
Frequently asked questions
How do I calculate simple interest? Multiply the principal by the annual rate (as a decimal) and by the number of years.
What is the difference between simple and compound interest? Simple interest is only on the principal; compound interest also earns interest on previous interest.