Simple Interest Calculator
Solve any missing piece of your simple interest problem. Whether you need to know how much you'll earn or what interest rate you need to reach a goal, this tool provides the answer instantly.
What is the formula for simple interest?
The fundamental formula is I = P × r × t, where I is the interest earned, P is the principal amount, r is the annual interest rate (as a decimal), and t is the time in years.
How do I solve for the principal (P)?
To find the starting amount, rearrange the formula: P = I / (r × t). For example, if you earned $50 in interest at a 5% rate over 2 years, your principal was $50 / (0.05 × 2) = $500.
What is the difference between simple and compound interest?
Simple interest is calculated only on the initial principal. Compound interest is calculated on the principal plus any accumulated interest from previous periods. Compound interest grows faster over time.
How do I convert months into years for the formula?
The time (t) in the formula must be in years. To convert months to years, divide the number of months by 12. For example, 6 months is 0.5 years.