Simple Interest Calculator

I = P x r x t. Principal times the yearly rate times the number of years. The total owed or held is P + I. Nothing is reinvested, so the yearly interest is the same every year - that is the whole difference from compound interest.

What is the difference between simple and compound interest?

Simple interest is always charged on the original amount. Compound interest is charged on the original amount plus the interest already added. Over one year they are identical. Over thirty years compound is dramatically larger, which is good when you are saving and bad when you are borrowing.

Which loans use simple interest?

Most US car loans, personal loans and mortgages use simple interest on the outstanding balance, which is why paying early saves money. Credit cards compound, usually daily.

How do I work out interest for months rather than years?

Enter the months as a fraction of a year: 6 months is 0.5, 18 months is 1.5, 90 days is about 0.25. The formula does not care about the unit as long as the rate and the time agree.

Can I use this to check a loan statement?

For a single lump repaid at the end, yes. For a loan you pay down monthly, the balance falls each month, so interest is smaller than this figure - use the loan calculator for that.