Simple Interest Calculator
Simple interest is charged or earned on the original amount only. It is common for short personal loans and some car loans, and it is the simplest way to see what money costs over time.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
Multiply the amount by the yearly rate, then by the number of years. That gives the interest. Add it to the amount to get the total.
The rate is a yearly figure, so a time in months should be turned into years first. For example, 18 months is 1.5 years.
Worked example
On $2,000.00 at 5% for 3 years, simple interest is $300.00, for a total of $2,300.00.
Questions
How is this different from compound interest?
Simple interest is not added back into the amount, so it does not earn interest itself. Over long periods, compound interest grows faster.
Do many loans use simple interest?
Some do, especially short personal and auto loans. Your loan papers show how interest is calculated.
Does it include fees?
No. Fees, late charges and insurance are not part of this calculation.
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