How to use the Simple Interest Calculator
The simple interest calculator adds up interest on a loan or deposit that does not compound, with an option to include extra months.
Open the Simple Interest Calculator →
What you need to enter
- Principal ($)
- Rate (% / year)
- Years
- Extra months
The formula
Interest = P × r × t, where P is the principal, r the annual rate (as a decimal) and t the time in years. Months are divided by 12 and added to the years.
Worked example
Using the default values in the calculator:
- Principal ($): 5000
- Rate (% / year): 4.5
- Years: 2
- Extra months: 0
| Interest earned | $450.00 |
| Balance | $5,450.00 |
Tips for better results
- Simple interest grows in a straight line, so it is easy to check by hand.
- Compare it with the compound result to see how much compounding adds.
Common mistakes to avoid
- Mixing up simple and compound interest when comparing offers.
- Forgetting to convert months to years.
Please note: Calculators and guides give general estimates, not financial, tax or investment advice. Real offers depend on your lender, location and personal situation. See our Disclaimer.