Formula
Simple interest does not compound:
Interest = principal × rate × years
A compound-interest page is separate because that balance earns interest on earlier interest.
Assumptions
- The rate stays flat.
- No interest is reinvested.
Worked example
$10,000 at 5% simple interest for 3 years earns $1,500.00.
Input definitions
- Principal
- The starting amount that does not change.
Limitations
This is an estimate, not a loan offer, tax filing, or investment advice. The currency control changes the symbol only.
Questions
When is simple interest used?
Some short loans and notes charge interest only on the original principal.
What is 5% of $10,000 for one year?
It is $500. This page multiplies that by the number of years.