Simple Interest Calculator
Work out interest that is charged only on the original principal — common for short-term loans and some bonds.
Simple vs. compound interest
Simple interest is calculated only on the original principal, using I = P × r × t. Unlike compound interest, it never earns interest on interest, so it grows in a straight line. It is common for car loans, some personal loans, and short-term notes.
When you will see it
Many auto loans and Treasury instruments use simple interest. Knowing the exact interest portion helps you compare offers and understand how much of each payment is cost versus principal.
Frequently asked questions
How is simple interest different from compound?
Simple interest is charged only on the principal. Compound interest is charged on principal plus accumulated interest, so it grows faster.