Interest Calculator
Find the total amount with a simple interest calculation.
How is it calculated?
Interest = Principal × Annual Rate × (Duration ÷ 12)
Example: 10,000 × 20% × (12 ÷ 12) = 2,000
More about this calculation
Interest is the cost of borrowing money, or the income earned by depositing it, usually expressed as an annual percentage. This calculator works out simple interest over a chosen period.
Simple interest is calculated only on the original amount, called the principal, using the formula interest equals principal times rate times time. Because it does not compound, the interest earned or paid is the same in every period. This makes it useful for quick estimates of deposits, credits and short-term loans.
Frequently asked questions
How is simple interest calculated?
Interest equals the principal multiplied by the annual rate and by the time in years. For 10,000 at 20% for one year, the interest is 2,000.
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus the interest already earned.
How do I use months in the calculation?
Convert months to years by dividing by twelve. For example, 6 months is half a year.