Simple Interest Calculator
The classic I = P × r × t — solved for whichever variable you're missing: interest, principal, rate, or time.
The simple interest formula, four ways
Deposit $5,000 at 6% simple interest for 3 years:
I = 5,000 × 0.06 × 3 = $900 → total value $5,900
Simple vs. compound: the growing gap
| Years ($5,000 at 6%) | Simple interest | Compound (annual) | Gap |
|---|---|---|---|
| 3 | $900 | $955 | $55 |
| 10 | $3,000 | $3,954 | $954 |
| 20 | $6,000 | $11,036 | $5,036 |
| 30 | $9,000 | $23,717 | $14,717 |
Simple interest grows in a straight line; compounding curves upward. That's good news when you're the borrower (many auto and student loans accrue simple daily interest) and the reason to prefer compounding when you're the saver — see the compound interest calculator for the full curve.
Frequently asked questions
What is the simple interest formula?
I = P × r × t. $5,000 at 6% for 3 years → $900.
What's the difference between simple and compound interest?
Simple charges on principal only; compound charges on principal + accumulated interest, so it grows faster every year.
What loans use simple interest?
Many auto, personal, and federal student loans (simple daily accrual). Credit cards compound.
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Note: Educational tool; actual accounts may accrue and compound differently. Not financial advice. Last reviewed: July 2026.