Simple interest calculator
With simple interest the interest is charged on the starting amount only, so it grows by the same amount every year. The calculator shows the interest and the final total.
A balance of 10000.00 at 5% a year earns 5000.00 over 10 years, making 15000.00 in total.
Formula
P is the starting balance, r the annual rate as a decimal and t the number of years. Interest grows linearly.
How we got there
Compare the result with the compound interest calculator — the gap is what compounding is worth.
How to work out simple interest by hand
- Work out one year of interest
10,000 × 5% = £500. That amount is added every year, unchanged.
- Multiply by the number of years
500 × 10 = £5,000. With simple interest every year contributes the same.
- Add the balance if you need the total
10,000 + 5,000 = £15,000.
Want to compare the two kinds of interest? a lesson with a Mathema tutor
Frequently asked questions
Multiply the balance by the rate and the number of years: 10,000 × 0.05 × 10 = £5,000 of interest.
On short-term loans, fixed-coupon bonds, and in school questions where interest is not compounded.
In this example £1,288.95 less over ten years. The gap widens every year.
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