How do you calculate simple interest?

Use I = P × r × t / 100, where P is the principal, r is the annual rate in percent, and t is the time in years. The final amount is A = P + I. For 1000 at 5% for 3 years, I = 1000 × 5 × 3 / 100 = 150, so the total is 1150. The interest is the same flat amount each year because it is always based on the original principal.

What is the difference between simple and compound interest?

Simple interest is charged only on the original principal, so the interest each period is a constant flat amount. Compound interest is charged on the principal plus all previously accumulated interest, so it grows faster and faster. Over one year the two are nearly identical, but over many years compound interest pulls well ahead. Loans and savings quoted as 'flat' use simple interest; most savings accounts and mortgages compound.

How do I find the interest rate from interest earned?

Rearrange the formula: r = 100 × I / (P × t). If 1000 earns 150 in interest over 3 years, then r = 100 × 150 / (1000 × 3) = 5% per year. You can solve for any single unknown the same way — principal P = 100I/(rt) or time t = 100I/(Pr) — by leaving that field blank in the calculator and supplying the other three.

How do I calculate simple interest for months or days?

Convert the time to years before using the formula. For months, divide by 12; for days, divide by 365 (or 360 in some banking conventions). For example, 6 months is t = 0.5 years and 90 days is t ≈ 0.2466 years. Then apply I = P × r × t / 100 as usual. Keep the rate annual to match the time in years.

Simple Interest Calculator — I = P × r × t

Time	Interest	Final amount
1 year	50	1050
3 years	150	1150
5 years	250	1250

Simple interest is the most basic way interest is charged: a flat percentage of the original principal, every period, with no interest on interest. The formula is I = P·r·t/100, and the final amount is A = P + I. Because it always uses the starting principal, the interest each year is the same fixed amount, which makes simple interest grow in a straight line — slower than compound interest, which snowballs. It's the model behind many flat-rate loans, short-term deposits and finance coursework.

Reviewed: June 20, 2026 · Author: Naveen P N, Founder — AI Calculator · Verified against: the simple-interest relation I = Prt. Not financial advice.

The simple interest equations

Interest

I = P × r × t / 100 (r % per year, t in years)

Final amount

A = P + I = P × (1 + r·t/100)

Rearranged

P = 100I/(rt) · r = 100I/(Pt) · t = 100I/(Pr)

Multiply the principal by the rate (as a percent) and the time (in years), then divide by 100 for the interest. Add it to the principal for the final amount. Because the interest is a fixed fraction of the unchanging principal, each year contributes the same Pr/100 — so the total interest is just that yearly amount times the number of years. To find any single unknown, leave it blank and supply the other three; the calculator rearranges the formula for you.

Worked example — a 3-year deposit

Scenario: You deposit 1000 at a simple annual rate of 5% for 3 years.

Interest

I = 1000 × 5 × 3 / 100 = 150

Final amount

A = 1000 + 150 = 1150

You earn 150 in interest — exactly 50 each year — for a final amount of 1150. Over 1 year it would be 50 (total 1050), and over 5 years 250 (total 1250): the interest grows in a straight line. Compound interest on the same deposit would earn slightly more (about 158 over 3 years), and the gap widens sharply over longer periods because compounding earns interest on the interest, while simple interest never does.

Related financial calculators

Compound Interest Calculator — interest on interest.
Mortgage Calculator — monthly home-loan payment.
Loan EMI Calculator — equated monthly instalment.
Percentage Calculator — percent of a number.
Sales Tax Calculator — tax and total price.

Frequently Asked Questions

How do I calculate simple interest?⌄

I = P·r·t/100. 1000 at 5% for 3 yr = 150; final amount A = P + I = 1150.

Simple vs compound interest?⌄

Simple = flat, on the original principal. Compound = on principal + accrued interest, grows faster.

How do I find the rate?⌄

r = 100·I/(P·t). 150 on 1000 over 3 yr → 5% per year.

What about months or days?⌄

Convert to years: 6 months = 0.5, 90 days ≈ 0.247 (÷365). Keep the rate annual.

What is the final amount formula?⌄

A = P + I = P·(1 + r·t/100). 1000 at 5% over 3 yr → 1150.

Simple Interest Calculator

Simple interest — Quick answer