Simple Interest Calculator
Calculate simple interest on a deposit or loan from the principal, annual rate and term. See total interest and final balance instantly for free.
Enter a rate from 0% to 1,000%.
Enter a term from 0 to 100 years.
Your results
Calculation breakdown
- Simple interest
- $10,000.00 × 5% × 3 years = $1,500.00
Assumptions
- Simple interest does not compound — interest is calculated only on the original principal.
- Use the Compound Interest calculator when interest is added to the balance and earns further interest.
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How this calculator works
Simple interest is calculated only on the original principal, unlike compound interest which earns interest on interest. Enter your principal, annual rate and term to see the total interest earned and the final balance.
Simple interest formula
Simple interest is the original principal multiplied by the annual interest rate and the time in years. A $10,000 principal at 5% a year for three years produces $1,500 interest and a $11,500 final balance.
Convert the annual percentage rate to a decimal before multiplying, and enter the term in years. The calculator keeps the interest separate from the final principal-plus-interest total.
- Interest = principal × annual rate × time
- Final balance = principal + simple interest
- Interest is calculated only on the original principal
When simple interest differs from compound interest
With simple interest, previously earned interest does not itself earn interest. Compound interest adds earnings to the balance periodically, so the difference generally becomes larger as the rate, term or compounding frequency increases.
Check the product or loan terms before choosing a method. Many Australian savings accounts and loans compound or calculate interest daily, while some quotes use a flat or simple-interest illustration that may not represent the effective cost or return.
Official sources and assumptions
Check the official or authoritative references used to review this calculator's rates, formulas and assumptions.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal each period, while compound interest also earns returns on previously earned interest, so it grows faster over time.
Where is simple interest used?
Some short-term loans, bonds and basic savings products use simple interest, though most Australian savings and investment products compound.
How is the interest calculated?
Interest = principal × annual rate × number of years. It does not change based on compounding frequency.
Content responsibility
Maintained by CalcAussie and last updated 30 September 2026. Checks applied: calculation method, worked examples, Australian terminology, material assumptions, official references where an external rule applies, and user-facing limitations.
Calculator results remain estimates based on the figures entered. Check material decisions against current official information and report a suspected error so it can be reproduced and corrected.
Results are estimates only and are not financial, tax, legal or credit advice.