Simple interest calculator
Calculate simple interest and the final amount from principal, rate and time.
In simple interest, interest always applies to the initial principal (unlike compound interest).
How the calculation works
With simple interest, the return always applies to the initial amount (the principal), never to interest already earned. So growth is linear — the same amount every period.
I = P × r × t and Amount = P + I
P= principalr= rate per period (decimal)t= number of periods
Match the units: rate and time must be in the same period. A monthly rate needs time in months.
Step-by-step example
R$1,000 at 2% per month for 10 months:
- Interest: 1,000 × 0.02 × 10 = R$200
- Amount: 1,000 + 200 = R$1,200
Difference from compound interest
With compounding, each month's interest also earns in the next month, and the amount accelerates. The same R$1,000 at 2%/mo for 10 months would yield ~R$219 compounded, vs R$200 simple. The longer the term, the wider the gap.
Examples
- R$2,000 at 1.5%/mo for 6 months: I = 2,000 × 0.015 × 6 = R$180.
- R$5,000 at 12%/yr for 2 years: I = 5,000 × 0.12 × 2 = R$1,200.
Frequently asked questions
When is simple interest used?
In some short-term contracts and fines. Most investments and loans use compound interest.
How to convert the rate to the right period?
In the simple regime, just use proportion: 12%/year equals 1%/month (12 ÷ 12). This holds only for simple interest.
Is simple interest better for investors?
No. Investors gain more with compounding. Simple interest tends to be worse for savers and "better" only for borrowers.
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Updated on June 17, 2026 · by Rafael Rossi · Methodology & sources