Interest Calculator
Calculate simple interest from principal, an annual rate, and a time period in years. The result separates the original amount from interest earned and reports the ending balance.
Interest Calculator tool
About the Interest Calculator
Use the yearly table to evaluate a noncompounding savings illustration or a simple-interest agreement. Fractional years are supported, with a final partial-year row. Results are estimates, not financial advice.
How Is Interest Calculated?
Simple interest always uses the original principal. Previously earned interest does not earn additional interest. Enter time in years, such as 0.5 for six months.
I = P × (annual rate ÷ 100) × years
Ending balance = P + I
Example
$1,000 at 5% simple interest for 2.5 years earns $125 and ends at $1,125.
How to Use the Interest Calculator
- Enter the original principal.
- Enter the annual percentage rate.
- Enter years, including a decimal for a partial year.
- Read interest earned and ending balance.
- Use the year-by-year table to see cumulative growth.
Interest Calculator Examples
Two years
At 5% simple interest, $1,000 earns $100 over two years, giving a $1,100 balance.
Six months
At 4% simple interest, $5,000 earns $100 over 0.5 years, giving a $5,100 balance.
Simple versus compound interest
Simple interest grows linearly with time. Compound interest adds earned interest to the amount that can earn more interest.
Agreement-specific details
Actual contracts may use daily accrual and different day-count conventions. Taxes, fees, deposits, and withdrawals are not included.
Frequently Asked Questions
Does interest compound?
No. Only the initial principal earns interest.
Can I calculate part of a year?
Yes. Enter a decimal year such as 0.25 for three months.
What happens at a zero rate?
Interest is zero and the ending balance equals principal.
Are the table amounts annual earnings?
The interest column shows cumulative interest through each listed year, not just that year’s earnings.
Does this model a standard installment loan?
No. Installment loans normally charge interest on a declining balance. Use the loan calculator for that structure.