Simple Interest Calculator
Simple interest never compounds: it's always principal × rate × time. It governs many auto loans' daily accrual, T-bill quotes, and court-ordered interest — and it's the baseline for understanding what compounding adds.
- Total (principal + interest)
- $11,800.00
- Compound interest would add
- $166.81
How this calculator works
- Interest = principal × annual rate × years, credited without ever earning interest on itself. Over short periods simple and compound interest barely differ; over decades the gap becomes enormous.
I = P × r × t
Frequently asked questions
Where is simple interest actually used?
Most auto loans accrue simple interest daily on the remaining balance, Treasury bills are quoted on a simple-discount basis, and statutory/legal interest is typically simple.
Simple vs compound — how big is the difference?
$10,000 at 6% for 30 years: simple interest earns $18,000; monthly compounding earns about $50,200. Time turns the difference from trivial to overwhelming.
Is my savings account simple interest?
No — virtually all deposit accounts compound (daily or monthly). Simple interest mostly appears on the borrowing side.
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Disclaimer: Results are estimates for educational purposes only and are not tax, legal, or financial advice. Tax rules are simplified (credits, phase-outs, and local taxes may not be modeled). Verify important decisions with the IRS, your state tax authority, or a licensed professional.