What is the simple interest formula?

I = P × r × t, where P = principal, r = annual rate (as decimal), t = time in years. Amount = P + I.

When is simple interest used?

Short-term loans, some bonds, and when interest is not compounded.

Divide by 100. For example, 5% means r = 0.05 in the formula.

Calculate simple interest I = P×r×t. Enter principal, annual rate, and time in years.

Principal ($)

Annual rate (%)

Time (years)

What is the simple interest formula?: I = P × r × t, where P = principal, r = annual rate (as decimal), t = time in years. Amount = P + I.
When is simple interest used?: Short-term loans, some bonds, and when interest is not compounded.
How do I convert rate from percentage?: Divide by 100. For example, 5% means r = 0.05 in the formula.

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