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Simple Interest Calculator: Interest = P x R x T

Enter principal, annual rate and time to see the interest and total, plus how much more you would owe if interest compounded monthly.

Simple interest calculator

Example defaults: $5,000 at 8% a year for 3 years. Simple interest = principal x rate x time.

Simple interest
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Compounded monthly, for comparison
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Estimates only, based on the numbers you enter. Example defaults are illustrations, not offers. A lender's written Truth in Lending disclosure shows your actual APR, finance charge and payment schedule. Nothing you type here is saved or sent.

Quick answer

Simple interest is principal times the annual rate times the time in years. Enter those three numbers to see the interest and total, and compare it with monthly compounding.

Simple interest is the most basic way to price borrowing: a rate charged on the original amount for a set time. Use this to check quick math or to see how much compounding adds.

The formula

I = P x R x T

P is the principal, R is the annual rate as a decimal, and T is time in years.

Worked example

$5,000 at 8% for 3 years:

InterestTotal
Simple interest$1,200$6,200
Compounded monthlyabout $1,351about $6,351

Compounding adds about $151 here because interest is charged on earlier interest. Worked examples are arithmetic illustrations, not offers.

Where you see each

  • Simple interest: some short-term loans and quick estimates.
  • Compound interest: savings accounts, and credit cards, where the CFPB says interest is often calculated daily and added to the balance.
  • Amortizing loans: most personal and auto loans charge interest on the shrinking balance. Use the amortization calculator.

Comparing offers? Look at APR, which includes certain fees. Read APR explained.

Ready to see real numbers? Use the form on this page to check whether partner lenders may have an offer, with the APR and full payment schedule shown before you commit, or call (800) 236-7761.

Examples are illustrations, not offers. Approval, APR and terms depend on the lender, your state and your credit profile.

Questions about simple interest calculator: interest = p x r x t

What is the simple interest formula?

Interest = principal x annual rate x time in years. $5,000 at 8% for 3 years is $5,000 x 0.08 x 3 = $1,200.

What is the difference between simple and compound interest?

Simple interest is charged only on the original principal. Compound interest is also charged on interest that has already been added.

Do personal loans use simple interest?

Most fixed-rate installment loans charge interest on the remaining balance each period and are paid down on a schedule. Use the amortization calculator for those.

Do credit cards use simple interest?

No. The CFPB explains that many card issuers calculate interest daily and add it to the balance, so it compounds.

Sources

  1. CFPB: What is a daily periodic rate on a credit card? (accessed 2026-10-09)
  2. CFPB: What is the difference between a loan interest rate and the APR? (accessed 2026-10-09)
  3. CFPB: Regulation Z (Truth in Lending), 12 CFR Part 1026 (accessed 2026-10-09)

Last updated 2026-10-09. How we research and update pages.

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