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Simple interest calculator

Calculate the interest a principal earns at an annual rate over a term in years, months, or days, and the final amount you will receive.

The amount you deposit or lend at the start.

The agreed annual rate, for example 5.

The duration of the deposit or loan.

Years, months, or days.

Fill in the fields to see the result instantly.

Calculation assumptions

  • Months are converted to years by dividing by 12, and days by dividing by 365.
  • Interest does not compound: it is always calculated on the initial principal.
  • The result is rounded to 2 decimal places at the end of the calculation (half up).

What this calculator does

This calculator finds the interest a principal earns using the simple interest formula: interest is always calculated on the initial principal and never compounds. You enter the principal, the annual rate, and the term (in years, months, or days) and get the interest earned and the final amount.

It is the typical calculation for fixed-term deposits, loans between individuals, and simple late-payment surcharges, where interest is not added to the principal to generate more interest.

Who it is for

  • People comparing fixed-term deposits who want to know what they will receive at maturity.
  • Anyone lending or borrowing under a simple interest agreement who needs a clear figure.
  • Financial math students who want to verify exercises step by step.
  • Anyone who wants a quick estimate of what a principal yields at a given rate.

What information you need

  • The initial principal: the amount deposited or lent.
  • The annual interest rate as a percentage, for example 5.
  • The term and its unit: years, months, or days.

How it is calculated

Simple interest multiplies three factors: principal, annual rate (as a fraction), and time in years. A term in months is divided by 12, and a term in days is divided by 365. For example, 18 months equals 1.5 years.

The final amount is simply the principal plus the interest earned. Unlike compound interest, the interest of each period is not added to the principal: a 2-year deposit earns exactly twice as much as a 1-year one.

The math runs on integer cents and the interest is rounded to 2 decimal places once, at the end, rounding ties up (half up).

Formula

Interest earned
interest = principal × (annual rate ÷ 100) × time in years
Time in years
years = months ÷ 12 · years = days ÷ 365
Final amount
final amount = principal + interest

Worked example

You deposit $1,000 at a 5% annual simple interest rate for 18 months. How much interest do you earn and how much do you receive at the end?

  1. Convert the term to years: 18 ÷ 12 = 1.5 years.
  2. Convert the rate to a fraction: 5% = 5 ÷ 100 = 0.05.
  3. Multiply: $1,000 × 0.05 × 1.5 = $75.00 of interest.
  4. Add the interest to the principal: $1,000 + $75.00 = $1,075.00.

You earn $75.00 in interest and receive $1,075.00 at the end of the term.

How to interpret the result

Interest grows in a straight line with time: double the term, double the interest. That is why simple interest yields less than compound interest over long terms.

The rate you enter is annual. If you are quoted a monthly rate, multiply it by 12 before using it here (or convert the term to the unit of the rate).

The result is a gross estimate: it does not deduct taxes or fees your bank may apply to the interest.

Common mistakes

  • Using a monthly rate as if it were annual: a 2% monthly rate equals 24% per year in simple interest.
  • Forgetting to convert the term: 18 months is not 18 years. The calculator converts for you based on the chosen unit.
  • Comparing a simple interest offer with a compound one by the rate alone: at the same rate and term, compounding pays more.
  • Assuming interest is reinvested: in simple interest, interest never generates more interest.

Frequently asked questions

What is the difference between simple and compound interest?

With simple interest, interest is always calculated on the initial principal. With compound interest, interest is added to the principal and earns more interest. At the same rate and term, compounding always yields more; the gap grows with time.

How are days converted to years?

This calculator divides days by 365 (365-day year convention). Some contracts use a 360-day commercial year; if yours does, the result may differ slightly. Always check the convention agreed in your contract.

Can I use this calculator for a loan?

Yes, as long as the loan uses simple interest and is repaid in full at the end (principal plus interest in a single payment). If the loan is repaid in monthly installments, use the loan calculator, which applies the French amortization system.

Can the rate be zero?

Yes. With a 0% rate the interest is $0 and the final amount equals the principal. It is useful for checking interest-free scenarios or family agreements at no cost.

Why does my bank show a slightly different amount?

It may use a different day-count convention (360 instead of 365), a different interest payment frequency, or apply withholdings and taxes on the interest. This calculator shows gross interest with the convention documented in the assumptions.

Sources

Last reviewed:
July 20, 2026
Calculation version:
1.0.0

Important notice

The results of these calculators are informative estimates and may differ from official calculations. They do not constitute legal, tax, or financial advice. Always verify with the competent institutions or a professional.

Related calculators

Compound interest calculator

Calculate how your money grows with compound interest: initial principal, periodic contributions, compounding frequency, and a year-by-year table.

Loan calculator

Calculate the monthly payment of a loan, the total to pay, the total interest, and the full amortization schedule (French system).