Reckonary / Finance / Simple interest calculator
Total value
Simple interest is charged only on the amount you start with — the principal — and never on the interest already earned. Because of that, the balance grows by the same dollar amount every year. This calculator shows the interest and the final value for any principal, rate, and number of years.
Interest equals principal times the annual rate times the number of years: I = P × r × t. So $1,000 at 5% for 3 years earns $1,000 × 0.05 × 3 = $150, leaving a total of $1,150. The ledger bar above shows how much of the final value is interest versus your original principal.
With compound interest, each period's interest is added to the balance and goes on to earn interest itself, so the total accelerates over time. Simple interest skips that step, which makes it easier to predict but slower to grow. Over short periods the gap is small; over many years compounding pulls well ahead.
Many car loans, short-term personal loans, and some bonds use simple interest, and it's a common teaching example because the math is clear. Savings accounts and most long-term loans use compounding, so check which one applies before relying on a figure.
Can I solve for the rate or the principal instead of the interest?
This calculator solves for interest and final value. To find the rate, divide the interest you want by principal times years; to find the principal, divide the interest by the rate times years.
How do I handle a loan term measured in months?
Convert months to a fraction of a year before entering it. Eighteen months is 1.5 years, and nine months is 0.75 years.
Is simple interest the same as APR?
Not always. APR can fold in fees and may assume compounding. Simple interest here is just principal times rate times time, so compare carefully before quoting an APR.
Does a higher rate or a longer term add more interest?
With simple interest both have a straight-line effect, so doubling the rate and doubling the years each double the interest. Neither one accelerates the way compounding does.
Last reviewed June 2026. This tool is for education, not financial advice.