Simple Interest Calculator
Simple Interest Calculator
Simple interest uses I = P × r × t. Interest each year is based on the original principal only.
Principal
$10,000.00
Total interest
$10,000.00
Final balance
$20,000.00
Growth chart
Year-by-year schedule
| Year | Interest earned | Cumulative interest | Balance |
|---|---|---|---|
| 1 | $500.00 | $500.00 | $10,500.00 |
| 2 | $500.00 | $1,000.00 | $11,000.00 |
| 3 | $500.00 | $1,500.00 | $11,500.00 |
| 4 | $500.00 | $2,000.00 | $12,000.00 |
| 5 | $500.00 | $2,500.00 | $12,500.00 |
| 6 | $500.00 | $3,000.00 | $13,000.00 |
| 7 | $500.00 | $3,500.00 | $13,500.00 |
| 8 | $500.00 | $4,000.00 | $14,000.00 |
| 9 | $500.00 | $4,500.00 | $14,500.00 |
| 10 | $500.00 | $5,000.00 | $15,000.00 |
| 11 | $500.00 | $5,500.00 | $15,500.00 |
| 12 | $500.00 | $6,000.00 | $16,000.00 |
| 13 | $500.00 | $6,500.00 | $16,500.00 |
| 14 | $500.00 | $7,000.00 | $17,000.00 |
| 15 | $500.00 | $7,500.00 | $17,500.00 |
| 16 | $500.00 | $8,000.00 | $18,000.00 |
| 17 | $500.00 | $8,500.00 | $18,500.00 |
| 18 | $500.00 | $9,000.00 | $19,000.00 |
| 19 | $500.00 | $9,500.00 | $19,500.00 |
| 20 | $500.00 | $10,000.00 | $20,000.00 |
How to use
- Enter principal, annual interest rate, and number of years.
- Review total interest and final balance in the summary cards.
- Use the three-line growth chart and table to inspect year-by-year growth.
FAQ
What is simple interest?
Simple interest is calculated only on the original principal, so interest earned each year stays constant when the rate is fixed.
What do the three chart lines mean?
Balance is principal plus cumulative interest. Cumulative interest is total interest earned so far. Principal is the original amount you invested or borrowed.
Is my data uploaded?
No. Processing runs locally in your browser.
Does this tool provide financial advice?
No. Results are informational estimates only and do not replace professional advice.
Introduction
A simple interest calculator helps you estimate interest earned when interest is based only on the original principal.
What is simple interest calculator?
Simple Interest Calculator uses the formula I = P × r × t to compute total interest and final balance. It also builds a yearly schedule and a growth chart so you can see how balances accumulate.
It is most useful for short-term loans, basic savings examples, and teaching interest concepts.
Understanding the three chart lines
The growth chart shows three lines on purpose. Each line answers a different money question, and reading them together prevents common mistakes such as treating every increase as “profit.”
1. Balance (final amount)
What it shows: Your total amount at the end of each year.
Why it matters: Balance is the practical outcome — the amount you would have (or owe) after interest is applied. It is the line people usually care about first when planning a loan payoff or savings target.
Formula:
Balance(t) = P + I(t)
I(t) = P × r × t
Where:
P= principal (starting amount)r= annual interest rate as a decimal (for example, 5% =0.05)t= time in years
So after t years:
Balance(t) = P × (1 + r × t)
2. Cumulative interest (growth from interest only)
What it shows: Total interest earned from year 1 through the selected year.
Why it matters: This line isolates the cost or reward of interest itself. Without it, a rising balance can look like strong growth even when most of the money is still just your original principal.
Formula:
CumulativeInterest(t) = P × r × t
With simple interest, interest each year is constant:
InterestInYear = P × r
That is why the cumulative-interest line rises in a straight pattern when the rate is fixed.
3. Principal (money you put in)
What it shows: The original principal only. Simple interest does not add contributions in this tool, so this line stays flat.
Why it matters: Principal is the baseline. It tells you how much of the balance is your own money versus interest. Comparing principal to balance makes the interest share obvious at a glance.
Formula:
Principal(t) = P
Why all three lines are needed
If the chart showed only Balance, you would see growth but not the source of that growth.
Example: principal $10,000, rate 5%, term 10 years.
- Principal =
$10,000 - Cumulative interest =
$5,000 - Balance =
$15,000
All three numbers matter:
- Principal answers: “How much did I start with?”
- Cumulative interest answers: “How much did interest add?”
- Balance answers: “What is the total now?”
Together they support better decisions:
- Compare interest cost versus principal on a loan-style scenario.
- Teach why simple interest grows linearly instead of exponentially.
- Cross-check the table: at every year,
Balance = Principal + Cumulative interest.
Key Features
- Summary cards for principal, total interest, and final balance.
- Growth chart with balance, cumulative interest, and principal lines.
- Hover details for each year on the chart.
- Year-by-year table with interest earned and ending balance.
Common Use Cases
- Estimating interest on a fixed principal over several years.
- Comparing simple interest against compound interest scenarios.
- Creating a clear yearly schedule for reports or teaching.
Best Practices
- Confirm the annual rate and term before interpreting results.
- Remember simple interest does not compound on prior interest.
- Read all three chart lines together before drawing conclusions.
- Treat outputs as planning estimates, not guarantees.