Simple Interest Loan Calculator: I = P × r × t

This calculator works out simple interest, charged on the original principal only, with no interest on interest. Enter the principal, the yearly rate and the time in years; you get the interest and the total to repay.

Formula

I = P × r × t, where r is the yearly rate as a decimal (percent ÷ 100) and t the time in years. Total = P + I.

Worked Example

$10,000 at 5% simple interest for 3 years.

1. r = 5 ÷ 100 = 0.05
2. I = 10,000 × 0.05 × 3 = $1,500.00
3. Total = 10,000 + 1,500.00 = $11,500.00

Assumptions

• Interest is charged on the original principal for the whole time; nothing is repaid along the way.
• For part of a year, enter the time as a decimal (6 months = 0.5).

How to read the result

Simple interest grows in a straight line with time. An amortizing loan at the same rate costs less interest, because the balance falls as you pay.

Limits and common mistakes

• Use years for t; for days use days ÷ 365.
• A loan quoted with “add-on” or flat interest uses this formula on the full amount, which makes the real APR much higher than the quoted rate.

Frequently Asked Questions

What is the simple interest on $10,000 at 5% for 3 years?

$1,500, for $11,500 in total.

Is simple interest the same as APR?

No. APR describes the yearly cost on a declining balance and includes some fees.

How do I work out simple interest for 90 days?

Use t = 90 ÷ 365 = 0.2466 years.

in p | Principal | $ | 10000 | 0 | 100000000
in rt | Interest rate per year | % | 5 | 0 | 100
in t | Time | years | 3 | 0 | 100
out i | Simple interest | $ | p * rt / 100 * t | 2
out a | Total to repay | $ | p + i | 2