Formula
I = P × r × t, and total = P + I. Time can be entered in years, months or days (days use a 365-day year).
Simple vs compound interest
With compound interest, interest is added to the balance and earns interest itself, so it grows faster over long periods. Simple interest is used for some short-term loans, car loans in some countries and bonds' coupon payments. Compare with the Compound Interest Calculator.
Frequently asked questions
Is simple interest better for borrowers?
Yes, at the same rate it costs less than compound interest.
How is a daily rate handled?
The time in days is divided by 365.
Can I calculate the rate from the interest?
Rearrange: r = I ÷ (P × t).