Calculate simple interest with the formula shown alongside the result.
Decimals are fine — 0.5 is six months
Total amount
$1,150.00
$1,000.00 principal plus $150.00 interest
Formula
I = 1000 × 0.05 × 3 = $150.00
What this assumes
A short loan
£1,000 at 5% for 3 years
1000A bond
Fixed coupon over a term
5000Part of a year
Fractional periods work
2500The original amount borrowed or invested.
The annual rate and the number of years. Fractions are fine — 0.5 is six months.
The difference against compound interest over the same term is shown, which is often larger than expected.
I = P × r × t with your own numbers substituted makes the method reusable rather than opaque.
Seeing both side by side makes clear what compounding is actually worth over the term.
Loans rarely run for whole years, and fractional periods are calculated exactly.
Simple interest is charged only on the original principal, never on accumulated interest. That makes it straightforward — I = P × r × t — and it is still how many short-term loans, bonds and informal agreements work. This calculator shows the interest, the total repayable, and the formula with your numbers substituted in, plus a direct comparison against what compound interest would have produced over the same period.
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