Use this simple interest calculator to estimate how much interest is earned or owed when interest is calculated only on the original principal. It is useful for short-term loans, basic savings products, bonds and educational exercises where compound growth is not involved. Enter the principal, annual rate and duration to see total interest, average monthly interest and final amount.
Simple interest is calculated on the original principal only. Compound interest is calculated on principal plus accumulated interest. Over time, compound interest grows significantly faster.
Simple interest is often used in basic financial examples, some short-term lending arrangements and products where interest is not reinvested. Many long-term investments use compound interest instead.
Formula: Interest = Principal × Rate × Time | Total = Principal + Interest | Where Rate is annual (%) and Time is in years.
Example: €10,000 at 5% for 3 years. Interest = 10,000 × 5% × 3 = €1,500. Total = €11,500. Monthly interest = €41.67.
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