OneTaskBy Tim King · Updated
Simple Interest Calculator
Simple Interest Formula Worked Out for Loans, Per Year and Per Month
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How the Simple Interest Calculator works
This simple interest calculator works out the interest on a sum of money when interest is charged or paid only on the original amount. Enter the principal, the annual rate and the time in years to get the interest, the total amount, and the interest per year and per month.
Simple interest calculator formula
Simple interest grows in a straight line because it is never added to the balance. The simple interest calculator uses the standard formula:
Interest = principal × rate ÷ 100 × years
The total amount is the principal plus the interest. Time can be a fraction, so six months is 0.5 years and 18 months is 1.5 years. Compound interest, by contrast, charges interest on earlier interest as well, which is why the two drift apart over long periods.
Worked example: a three-year loan
You borrow 10,000 at 5% simple interest for 3 years. Each year costs 10,000 × 0.05 = 500.00, so the interest over the term is 1,500.00 and the total to repay is 11,500.00. That works out at 41.67 of interest a month.
Worked example: six months
2,500 at 8% for half a year earns 2,500 × 0.08 × 0.5 = 100.00, for a total of 2,600.00. To see how many years it takes to double money at simple interest, divide 100 by the rate: at 8% that is 12.5 years.
Simple interest reference table
Simple interest on 10,000 at rates from 1% to 25%, over 1, 3, 5 and 10 years.
| Rate | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| 1% | 100.00 | 300.00 | 500.00 | 1,000.00 |
| 2% | 200.00 | 600.00 | 1,000.00 | 2,000.00 |
| 3% | 300.00 | 900.00 | 1,500.00 | 3,000.00 |
| 4% | 400.00 | 1,200.00 | 2,000.00 | 4,000.00 |
| 5% | 500.00 | 1,500.00 | 2,500.00 | 5,000.00 |
| 6% | 600.00 | 1,800.00 | 3,000.00 | 6,000.00 |
| 7% | 700.00 | 2,100.00 | 3,500.00 | 7,000.00 |
| 8% | 800.00 | 2,400.00 | 4,000.00 | 8,000.00 |
| 9% | 900.00 | 2,700.00 | 4,500.00 | 9,000.00 |
| 10% | 1,000.00 | 3,000.00 | 5,000.00 | 10,000.00 |
| 11% | 1,100.00 | 3,300.00 | 5,500.00 | 11,000.00 |
| 12% | 1,200.00 | 3,600.00 | 6,000.00 | 12,000.00 |
| 13% | 1,300.00 | 3,900.00 | 6,500.00 | 13,000.00 |
| 14% | 1,400.00 | 4,200.00 | 7,000.00 | 14,000.00 |
| 15% | 1,500.00 | 4,500.00 | 7,500.00 | 15,000.00 |
| 16% | 1,600.00 | 4,800.00 | 8,000.00 | 16,000.00 |
| 17% | 1,700.00 | 5,100.00 | 8,500.00 | 17,000.00 |
| 18% | 1,800.00 | 5,400.00 | 9,000.00 | 18,000.00 |
| 19% | 1,900.00 | 5,700.00 | 9,500.00 | 19,000.00 |
| 20% | 2,000.00 | 6,000.00 | 10,000.00 | 20,000.00 |
| 21% | 2,100.00 | 6,300.00 | 10,500.00 | 21,000.00 |
| 22% | 2,200.00 | 6,600.00 | 11,000.00 | 22,000.00 |
| 23% | 2,300.00 | 6,900.00 | 11,500.00 | 23,000.00 |
| 24% | 2,400.00 | 7,200.00 | 12,000.00 | 24,000.00 |
| 25% | 2,500.00 | 7,500.00 | 12,500.00 | 25,000.00 |
Quick answers
- 5% simple interest on 10,000 for one year is 500.00.
- 1,000 at 6% for 2 years earns 120.00 of simple interest.
- Simple interest for 9 months uses a time of 0.75 years.
- At 10% simple interest money doubles in 10 years.
- Monthly interest is the yearly interest divided by 12.
FAQ
What is the difference between simple and compound interest?
Simple interest is worked out on the original principal only, so it is the same every year. Compound interest is worked out on the balance including earlier interest, so it grows faster. Over one year at a single annual compounding they match.
Where is simple interest used?
Simple interest appears on some car loans, short-term personal loans, bonds paying fixed coupons, and informal loans between people. Most savings accounts and mortgages compound instead, so check the terms before relying on a simple interest figure.
How do I enter a term in months or days?
Convert it to years first. Divide months by 12, so 18 months is 1.5 years, or divide days by 365, so 90 days is about 0.2466 years. The calculator accepts any decimal number of years.
How do I find the rate from the interest?
Rearrange the formula: rate = interest ÷ (principal × years) × 100. If 4,000 earned 360 over 3 years, the rate is 360 ÷ 12,000 × 100 = 3% a year.
See also: all Debt tools, Pay, Bills, Property, Investing, Saving.
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