Interest Calculator
Calculate simple interest earned or paid over time. Quickly find missing variables like the required interest rate or the time needed to reach your goal.
Total interest earned
£150.00
A principal of £1,000.00 at a simple interest rate of 5.00% for 3.00 years will earn £150.00, resulting in a total amount of £1,150.00.
Total Amount (Principal + Interest)
£1,150.00
Interest
£150.00
About This Interest Calculator
Interest is the cost of borrowing money or the reward for saving it. In the financial world, understanding how interest accrues is crucial for making informed decisions about loans, savings accounts, and investments.
This calculator focuses on simple interest, which is calculated solely on the initial principal amount. Use it to figure out total interest owed on a short-term loan, interest earned on savings, the rate needed to hit a target, or the time required to reach a financial goal.
How To Use
The core formula (I = P × R × T)
Simple interest is calculated using I = P × R × T, where I is interest, P is principal, R is the annual rate in decimal form, and T is time in years.
How to calculate simple interest
Use the Find Interest tab. Enter your principal, annual interest rate percentage, and duration in years to calculate the interest earned or paid.
How to calculate interest rate
Use the Find Rate tab when you know the principal, interest amount, and time period. The calculator reverse-engineers the annual rate.
How to calculate time needed
Use the Find Time tab when you know the principal, rate, and target interest amount. The calculator shows the exact time required.
Frequently Asked Questions
What is the difference between simple and compound interest?v
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus previously earned interest, so it can grow faster over time.
How do I calculate interest for months instead of years?v
Convert months into years by dividing the number of months by 12. For example, 6 months is 0.5 years.
Is APY the same as simple interest?v
No. APY usually includes compounding over a year, while simple interest does not compound.
When is simple interest used in the real world?v
Simple interest is often used for short-term loans, some savings calculations, promissory notes, and quick finance estimates.
Can the interest rate be negative?v
In normal personal finance calculations, the interest rate is usually positive. A negative rate would reduce value over time.
Does this calculator work for loans as well as savings?v
Yes. Simple interest can represent interest you earn on savings or interest you pay on a loan.