Simple interest formula
Interest = principal × rate × time. Amount = principal + interest. Rate is the annual percent as a decimal. Time is in years. $8,000 at 6% for 3 years is $1,440 interest and $9,440 total.
Simple interest does not add earned interest back into the balance. Most savings accounts and many credit cards use compound interest instead. Use this page for simple-interest loans, some auto notes, and textbook problems.
Common questions
When should I use compound interest instead?
Savings, investments, and most mortgages compound. Open the compound interest calculator for those.
Can I enter months?
Yes. 18 months is 1.5 years.