Simple interest calculator
Simple interest: principal x (1 + annual rate x years). Example: 1,000,000 at 5% for 3 years ends at 1,150,000, earning 150,000.
Uses simple annual interest. Taxes, fees, and any provider-specific compounding are not included.
Formula estimate only. Rates, taxes, and legal rules vary by jurisdiction.
What to know
Simple interest pays the same amount every year because it is calculated on the starting principal only. The formula is maturity value = principal x (1 + rate x years), where the rate is the annual percentage divided by 100.
Worked example: 1,000,000 at 5 percent for 3 years gives 1,000,000 x (1 + 0.05 x 3) = 1,150,000, which is 150,000 of interest. For a term of 1.5 years the page returns 1,075,000. A rate of 0 returns the principal unchanged.
The summary shows the maturity value, the principal and the interest earned. The rate field accepts 0 to 100 and the term must be above 0 and at most 100 years, with decimals allowed.
Because nothing is reinvested, the same deal under annual compounding would end at 1,157,625, a difference of 7,625 after 3 years. The gap widens with time, so simple interest suits short terms and products that explicitly pay out interest separately.
Short-term products are where simple interest dominates: a 3-month deposit of 2,000,000 at 3 percent earns 2,000,000 x 0.03 x 0.25 = 15,000 when the term is entered as 0.25 years.
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How to use Simple interest calculator
- Enter Principal / amount 1,000,000.
- Enter Annual rate (%) 5 and Years 3.
- Read the Maturity value line, which shows 1,150,000.
- Check Interest earned, which shows 150,000.
Quick answers
How much simple interest does 500,000 earn at 4 percent in 6 months?
10,000, from 500,000 x 0.04 x 0.5. Enter 0.5 in the Years field.
How is it different from the compound-interest page?
Simple interest never adds earned interest back to the base, so every year pays the same amount.
Can I use it for a monthly rate?
The field expects an annual rate. Multiply a monthly rate by 12 first.