Simple Interest Calculator
Calculate linear simple interest on loans, deposits, and promissory notes using I = P × r × t.
Last verified: September 2026Inputs & Parameters
Calculation Results
Simple interest accumulates linearly without reinvestment or periodic compounding.
Understanding Simple Interest Calculations
Simple interest is calculated exclusively on the original principal amount, without compounding prior interest earnings. It is widely applied in short-term peer loans, promissory notes, auto retail contracts, and bond coupon payments.
Core Mathematical Formulas
- Simple Interest:
I = P × r × t - Total Repayment / Future Value:
A = P + I = P × (1 + r × t) - Time Normalization:
t = Years + (Months / 12) + (Days / 365)
Worked Example
A loan of $10,000.00 at 6.50% simple interest over 3 years and 6 months (3.5 years):
1. Total Interest = $10,000.00 × 0.065 × 3.5 = $2,275.00
2. Total Repayment Amount = $10,000.00 + $2,275.00 = $12,275.00
3. Annual Interest Charge = $10,000.00 × 0.065 = $650.00/yr
Assumptions & Limitations
Assumes an unvarying interest rate with no intermediate principal paydowns or capitalization events. Official day-count conventions (such as Actual/360 or 30/360) may produce minor variations in commercial banking contracts.