Simple Interest Calculation

Simple interest is the starting point of all financial education. It is the most direct way to calculate the return on a principal amount. Unlike compound interest, the interest you earn is not reinvested; it is calculated only on the initial amount. It's simple, predictable, and easy to understand.

Our calculator is ideal for understanding this fundamental concept. It shows you exactly how much your money can earn over a given period, without any frills. It's an excellent tool for students discovering finance or for anyone who wants to make a quick projection for a loan between friends or a short-term investment.

Practical Example:

Let's imagine you place $1,000 in a savings account with a simple interest rate of 5% per year. After 10 years, how much will you have earned?

The calculation is straightforward: $1,000 × 5% × 10 years = $500. Your total capital will therefore be $1,500. Our tool allows you to do this calculation instantly and see the direct impact of the rate and duration on your earnings.