Interest on the principal only, and how much compounding would add.
A simple interest calculator finds the interest earned or owed on a principal amount, without compounding, and shows how much more compounding would add over the same period.
Simple interest is charged only on the original principal, principal × rate × time, so it grows in a straight line. Compound interest is also charged on accumulated interest, so it curves upward and pulls ahead the longer the term runs. Over a year or two the difference is small; over decades it's the gap between a modest sum and a large one.
Simple interest shows up in some car loans, short-term personal loans, and certain bonds, where interest accrues on the balance without compounding. Most savings accounts, credit cards, and long-term loans compound instead. Knowing which one applies tells you whether time is working gently or aggressively on the balance, the tool shows both so you can see the spread.
Interest calculated only on the original principal, principal × rate × time. Unlike compound interest, it isn't earned on prior interest.
Some short-term loans, car loans, and bonds use simple interest. Most savings accounts and long-term loans compound.
Over short periods, little; over long periods, a lot. The calculator shows the difference for your inputs.
See the exact formula and a worked example on our methodology page.