Simple Interest Calculator
Calculate simple interest (I = P × r × t) and the total amount at the end.
Tip: Simple interest is calculated only on the initial principal — not on accumulated interest.
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About this digital tool
The simple interest calculator works out interest on an amount using the formula I = P × r × t, where P is the principal, r the annual rate and t the time in years. The total at the end is the principal plus interest. Interest is calculated only on the initial amount and is not compounded, so growth is linear and easy to predict.
It is used for short loans between people, some types of deposits, late-payment interest and contracts where the interest is simple. Enter the principal, the rate and the time (in days, months or years) and get the interest and the total. For long-term savings, compound interest gives a more realistic picture. The result is an estimate and depends on the terms of the contract.
How to use
- Enter the initial principal.
- Set the annual interest rate and the term in years.
- See the interest earned and the total amount at the end.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the initial principal, while compound interest is also calculated on accumulated interest, so it grows faster.
How is simple interest calculated?
Multiply the principal by the annual rate and by the time in years. For example, 200,000 lek at 5% for 3 years gives 200,000 × 0.05 × 3 = 30,000 lek in interest.
How do I convert time into months or days?
Divide months by 12 or days by 365 to convert to years. For example, 6 months is 0.5 years. The calculator does this conversion for you.
When is simple interest used instead of compound interest?
In short loans, some bonds and contracts where it is expressly agreed. Bank loans and long-term deposits usually use compounding.