Does simple interest compound?
No. Interest is calculated only on the original principal.
Simple Interest Calculator
Estimate interest that is calculated on the original principal only.
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Adjust the values below to get a clear estimate.
Interest on original principal
The annual percentage rate is converted to a decimal and multiplied by principal and elapsed years. No compounding is applied, so each year adds the same interest amount.
I = P × r × t; total = P + IWorked example
Three years at a constant rate
Inputs: principal: 1,000 · annualRate: 5% · years: 3
Illustrative result: Interest 150; total 1,150
The same 50 of interest is added for each year because the calculation uses the starting principal throughout.
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Frequently asked questions
Can the rate be zero?
Yes. A zero rate produces zero interest and leaves the total equal to the principal.