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Compute interest that grows linearly — principal × rate × time.
Compute interest that grows linearly — principal × rate × time.
Enter values above and click Calculate — results will appear here with the formula explained.
Simple interest grows linearly: each year adds the same fixed amount — the principal times the annual rate. A $5,000 balance at 4% earns exactly $200 every year, whether it's year one or year ten.
That contrasts with compound interest, where interest earns interest and growth accelerates. Simple interest appears in some personal and auto loans, short-term notes and bonds with coupon structures, while nearly all savings accounts compound.
Compute interest that grows linearly — principal × rate × time. Formula: I = P × r × t (r as a decimal, t in years).
Simple interest grows linearly: each year adds the same fixed amount — the principal times the annual rate. A $5,000 balance at 4% earns exactly $200 every year, whether it's year one or year ten.
That contrasts with compound interest, where interest earns interest and growth accelerates. Simple interest appears in some personal and auto loans, short-term notes and bonds with coupon structures, while nearly all savings accounts compound.
$5,000 at 4% simple interest for 3 years: I = 5000 × 0.04 × 3 = $600, so the balance ends at $5,600.
Formulas are standard public references (see our methodology). External standards are cited in the text where they apply.
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