The Simple Interest Calculator calculates the interest and end balance based on the simple interest formula. Click the tabs to calculate the different parameters of the simple interest formula. In real life, most interest calculations involve compound interest. To calculate compound interest, use the Interest Calculator.
• Select which variable to solve for using the tabs: Balance, Principal, Term, or Rate.
• Customize rate compounding frequencies (per year, month, quarter, or day) and flexible term units (years, months, quarters, weeks, days).
Calculate End Balance (A) from the other three variables.
Year-by-year linear simple interest accretion and end balance progression.
| Year / Period | Interest ($) | Balance ($) |
|---|---|---|
| Year 1 | +$600.00 | $20,600.00 |
| Year 2 | +$1,200.00 | $21,200.00 |
| Year 3 | +$1,800.00 | $21,800.00 |
| Year 4 | +$2,400.00 | $22,400.00 |
| Year 5 | +$3,000.00 | $23,000.00 |
| Year 6 | +$3,600.00 | $23,600.00 |
| Year 7 | +$4,200.00 | $24,200.00 |
| Year 8 | +$4,800.00 | $24,800.00 |
| Year 9 | +$5,400.00 | $25,400.00 |
| Year 10 | +$6,000.00 | $26,000.00 |
Simple interest is calculated exclusively on the original principal amount. Unlike compound interest, interest earned is never added back to the principal to compound in subsequent periods.
The formula is I = P × r × t, where I is interest, P is principal, r is the nominal annual rate, and t is time. Total ending balance is A = P + I = P(1 + r·t).
Simple interest is frequently used in auto financing, short-term personal notes, U.S. Treasury bills, and certificates of deposit that distribute simple periodic interest payouts.
Simple interest yields linear growth, whereas compound interest yields exponential growth. Over a 10-year period, compound interest significantly outperforms simple interest.
Universal interest rate engine supporting simple and compound accumulation.
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