Interest = P × R × T.
These calculators use standard financial formulas (amortization, compound interest, marginal tax brackets) to estimate results based on the numbers you enter. They don't account for your full financial picture, and results shouldn't be treated as financial, tax, or investment advice. For decisions with real money on the line, check the numbers with a lender, accountant, or financial advisor who can see your complete situation.
Simple interest ignores compounding. Interest is calculated once per period on the original principal only using I = P × R × T.
Common in short-term loans, some auto financing, and treasury bills. Long-term products use compound interest instead.
The key giveaway that a product uses simple interest: your interest cost stays exactly proportional to time, with no acceleration — twice the term means exactly twice the interest, nothing more.
$1,000 principal at 5%/year for 3 years: interest = $1,000 × 0.05 × 3 = $150. Total repayment: $1,150.
Short-term consumer loans, some auto financing, treasury bills, and back-of-envelope estimates.
Yes, all else equal — but posted rates for simple-interest products are often higher to make up for it.
Check your loan agreement's 'method of interest calculation' clause, or ask the lender directly — most auto loans and some personal loans use simple interest, while credit cards and mortgages compound.