How to use
- Enter the principal and the annual rate.
- Enter the time, and choose years or months.
- Press Calculate. The hero is the interest. The amount owed is principal plus that interest.
- If the interest should compound, use the compound-interest calculator instead.
How it's calculated
Interest = principal × (rate ÷ 100) × years. If you chose months, years = months ÷ 12.
The interest is not added to the principal at any intermediate date. That is the difference from compound interest.
Worked example
$5,000 at 6 percent for 3 years: 5,000 × 0.06 × 3 = $900 of interest. The amount owed is $5,900. The same principal for 18 months is 1.5 years, so the interest is $450.
Assumptions
One rate for the whole span, and no compounding. A 365-day year is not used. Months are exactly one twelfth of a year.
FAQ
How is this different from compound interest?
Compound interest adds interest onto the balance on a schedule. Simple interest multiplies once.
How is this different from interest-only?
Interest-only on this site is one month of interest on a balance that stays put. Simple interest covers the whole time you type.
Can I enter days?
Not on this form. Convert days to a fraction of a year yourself if your note uses a day count, and choose years.
Does the rate have to be an APR on a loan?
Type the annual rate the note uses. The label is an annual percent. The page does not look up a product.