Simple Interest Calculator

Simple interest is computed only on the original principal: I = principal × annual rate × years. Lending €5,000 at 4% for 3 years earns €600 of interest, with no compounding.

Simple interest applies to some short-term loans, bonds and private lending agreements. Most savings accounts and mortgages instead use compound interest, where interest itself earns interest — compare the difference with our compound interest calculator to see how much compounding matters over time.