Formula and method
FormulaInterest = principal × annual rate × time.
Simple interest is calculated only on the original principal, so interest does not earn additional interest.
Worked example
5,000 at 4% for 3 years earns 600 in interest and ends at 5,600.
How to use this calculator
- Enter the values using the labels and units shown.
- Review the live result and supporting details.
- Check the formula, example and assumptions before using the answer.
Assumptions and limits
- The rate is annual and constant.
- Time is expressed in years.
Reference
Formula reviewed 2026-07-15