How this calculator works
Simple interest grows linearly with time. The same principal earns interest each period, unlike compound interest, which also earns interest on earlier interest. Months are converted to twelfths of a year. This model does not use daily day-count conventions or regular repayments.
The formula
Interest = P × r × t
Final amount = P + Interest
P = principal; r = annual percentage / 100; t = years, or months / 12.A quick example
For 2,000 at 6% simple annual interest over 18 months: interest = 2,000 × 0.06 × 1.5 = 180, giving a final amount of 2,180.
How to use this calculator
- Enter principal and the annual simple interest rate.
- Enter time and select years or months.
- Calculate interest and the combined principal plus interest.
A few common questions
Does this compound interest?
No. Interest is calculated only on the original principal.
Can principal or interest be zero?
Yes. Zero principal or a zero rate gives zero interest.
Why could a contract differ?
A contract may use a specific day-count basis, fees or repayment schedule that is not modeled here.