Simple Interest Calculator
Enter a principal, annual rate and term to see the interest earned and the final balance.
Reviewed by the OmniCalc teamMethod verified 2026-07-01
150.00
Interest 150.00- Final balance
- 1,150.00
- Interest per year
- 50.00
- Principal
- 1,000.00
- Interest earned
- 150.00
Show steps
- Interest I = P × r × t = 1,000.00 × 5% × 3 = 150.00.
- Final balance = principal + interest = 1,000.00 + 150.00 = 1,150.00.
How to use the simple interest calculator
- 1Enter the principal — the starting amount.
- 2Enter the annual rate as a percent and the time in years.
- 3Read the interest earned and the final balance, with the working shown.
Simple vs compound
At 5% for 3 years, $1,000 earns a flat $150 in simple interest. Compounding would add a little more each year as interest itself starts earning — see the compound interest calculator for that path.
Frequently asked questions
What is simple interest?
Interest calculated only on the original principal, using I = P × r × t. Unlike compound interest, earned interest is not added back to the balance, so each period earns the same amount.
How does it differ from compound interest?
Compound interest earns interest on interest, so the balance grows faster over time. Simple interest grows in a straight line. For short terms the two are close; over many years compounding pulls well ahead.
What counts as the rate and time?
Enter the annual rate as a percentage and the time in years — fractional years are fine (six months is 0.5). The rate and time must use the same period; this tool assumes annual.