How to use the simple interest calculator
- Enter the principal – the amount lent or borrowed.
- Enter the yearly interest rate.
- Enter the time in years, months or days.
Simple interest formula
\text{SI} = \dfrac{P \times R \times T}{100}A = P + \text{SI}P– principal,R– rate per year in %,T– time in years (months ÷ 12, days ÷ 365)A– the total amount at the end
Example: 10,000 at 6% for 3 years
\text{SI} = \dfrac{10000 \times 6 \times 3}{100} = 1800- Total: 10,000 + 1,800 = 11,800
Finding the rate, time or principal
Rearrange the same formula:
R = \dfrac{100 \times \text{SI}}{P \times T}T = \dfrac{100 \times \text{SI}}{P \times R}P = \dfrac{100 \times \text{SI}}{R \times T}Simple interest is used for short loans, some car loans and many school problems. Savings accounts and deposits usually pay compound interest – see the compound interest calculator.
Frequently asked questions
What is the formula for simple interest?
SI = P × R × T ÷ 100, where P is the principal, R the yearly rate in percent and T the time in years. The total amount is P + SI.
How do I calculate simple interest for months?
Divide the months by 12 to get years. 10,000 at 6% for 8 months: 10,000 × 6 × 8/12 ÷ 100 = 400.
How do I calculate simple interest for days?
Divide the days by 365. 50,000 at 9% for 90 days: 50,000 × 9 × 90/365 ÷ 100 = 1,109.59.
Is simple interest better than compound interest?
For a borrower, yes – it costs less. For a saver, compound interest pays more because interest also earns interest.