About this tool
Compute interest that accrues only on the original principal — no compounding. Used for short-term loans and some bonds.
Formula
I = P · r · t and Total = P + I
Worked example
$1,000 at 5% for 3 years → I = 1000 × 0.05 × 3 = $150. Total = $1,150.
Notes
Simple interest underestimates real-world cost compared to compound interest. Most consumer loans (mortgages, credit cards) use compounding.