Finance
Simple Interest Calculator
Linear interest on an initial amount.
Final amount
$2,240.00
- Interest
- $240.00
- Initial capital
- $2,000.00
How it works
Simple interest is always computed on the original principal — no interest on interest. Common in late-payment fees, short contracts and some legacy loans.
Formula:
I = P × r × t M = P + I
Practical examples
$2,000 at 2%/mo for 6 months
I = 2000 × 0.02 × 6 = $240. M = $2,240.
$500 at 1.5%/mo for 10 months
I = 500 × 0.015 × 10 = $75. M = $575.
Late fee
$800 at 2%/mo for 3 months accrues $48 in interest.
Frequently asked questions
When should I use simple interest?
For late fees, short contracts or legal calculations. Most investments and loans use compound interest.
Do rate and time units need to match?
Yes. Monthly rate → time in months. This calculator uses months.