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Simple interest calculator
Interest = principal × rate × time. Enter the three, in years, months or days, and see the interest, the total due, and the daily accrual.
$1,500.00
simple interest
- Total (principal + interest)
- $11,500.00
- Interest per day
- $1.37
Working: $10,000 × 0.0500 × 3.000 yrs = $1,500.00
Borrowed as a monthly-payment loan over the same time, you'd pay about $790 in interest, because the balance shrinks each month. See the loan payoff calculator.
| Year | Interest to date | Balance |
|---|---|---|
| 1 | $500.00 | $10,500.00 |
| 2 | $1,000.00 | $11,000.00 |
| 3 | $1,500.00 | $11,500.00 |
Simple vs compounding vs amortizing
Simple interest is charged only on the original principal, so it grows in a straight line. It's used for many auto loans (accrued daily on the current balance), short-term notes, Treasury bills and some personal loans between friends and family. Savings accounts and credit cards instead charge interest on interest, so their balances grow faster than this calculator shows.
Questions people ask
What is the simple interest formula?
Interest = Principal × Rate × Time (I = P × r × t), with the rate as a decimal and time in years. $10,000 at 5% for 3 years earns 10,000 × 0.05 × 3 = $1,500.
How do I calculate simple interest per day?
Divide the annual interest by 365: principal × rate ÷ 365. On $10,000 at 5% that is about $1.37 a day. Many auto loans accrue interest daily this way.
Is a car loan simple interest?
Most US auto loans are "simple interest" loans: interest accrues daily on the current balance only, so paying early or extra cuts interest. The payment is still a fixed amortizing payment, which is why the loan comparison below matters.
Why is interest on an amortizing loan lower than simple interest on the full amount?
Simple interest here assumes the whole principal is owed for the whole term, as with a bond or a loan repaid in one lump. An amortizing loan pays principal down each month, so interest is charged on a shrinking balance.
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