Simple Interest Calculator

How much interest can I earn?

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Year Interest ($) Total Interest ($) Principal + Interest ($)

Using the simple interest calculator

  • Deposit - Initial money in your bank account, also known as principle.
  • Interest Rate - Annual interest rate.
  • Years - The duration of investment (e.g. 5 years).
  • ROI - Return on investment.

Simple interest formula

Simple interest can be calculated by multiply principle, interest rate and time periods.
Its formula is:
Simple interest = P * r * t

  • P is principle
  • R is annual interest rate
  • T is years

Simple interest vs compound interest

In simple interest, only principle makes money(earns interest), whether your investment lasts one year or ten years.

In compound interest, not only principle earns interest, but also interest earned in previous period will earn interest in the following periods.  Compound interest is used more popularly  in our real life, like credit card, saving and checking account, and mortgage loan.

For example, $10,000 at 8% annual interest rate,  compounded annually for 10 years.  Calculate its simple interest and compound interest.

Year 1 2 3 4 5 6 7 8 9 10
Annual simple interest $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Annual compound interest $800 $864 $933.12 $1,007.77 $1,088.39 $1,175.46 $1,269.50 $1,371.06 $1,480.75 $1,599.20

 

Year 1 2 3 4 5 6 7 8 9 10
Total simple interest $800 $1,600 $2,400 $3,200 $4,000 $4,800 $5,600 $6,400 $7,200 $8,000
Total compound interest $800 $1,664 $2,597.12 $3,604.89 $4,693.28 $5,868.74 $7,138.24 $8,509.30 $9,990.05 $11,589.25