Simple Interest Calculator – I = Prt

Simple interest accrues linearly: every period charges the same fixed interest because it is always computed on the original principal. The calculator multiplies the principal P by the annual rate r and the time t in years — months entered are converted to t = months ÷ 12 automatically. Example: a 15,000 loan at 4.5% flat for 5 years costs I = 15,000 × 0.045 × 5 = 3,375 in interest, making the final amount 18,375, or exactly 675 of interest per year. Contrast that with reducing-balance interest, where the same 4.5% on a 5-year amortized loan would cost around 1,775 — flat simple interest quoted by dealers is nearly twice as expensive as the same rate on a declining balance, so always ask which method a quoted rate uses.

1. 1

   Step 1

   Enter the principal P — the amount deposited or borrowed.

2. 2

   Step 2

   Enter the annual rate r as a percentage and the period t in years or months.

3. 3

   Step 3

   The tool returns total interest I and the final amount P + I.

4. 4

   Step 4

   Compare with a reducing-balance loan to see the true cost gap.

• Comparing flat with reducing rates

• Wrong time units

• Overlooking installment timing