Simple Interest Calculator - Accrued Interest & Payoff
Estimate simple interest earnings, total payoff balances, and annual interest payouts on loans or deposits across year, month, and day-count terms.
🔒 Financial Data Privacy: All numbers are calculated strictly in your browser with zero server storage.
How to Calculate Simple Interest
- Enter the Starting Principal amount borrowed, deposited, or invested into the first box above.
- Enter the Annual Interest Rate percentage charged on the loan or paid on the deposit.
- Enter the Term / Duration and choose years, months, exact 365-day counts, or 360-day counts.
- Review the ending balance, total interest accrued, and interest accrual schedule below.
Parameters Explained
- Time Unit & Day Count: Switches the term between full years, months, exact 365-day calendar counts, and the 360-day commercial Banker's Rule for short-term loans.
Key Features
- Instant calculation of accrued interest earnings, annual interest payouts, and final payoff balances.
- Multi-unit term flexibility supporting years, months, exact 365-day, and 360-day Banker's Rule counts.
- Visual donut chart comparing your starting principal against total simple interest accrued.
- Detailed interest accrual schedule with shareable calculation links and CSV table downloads.
- Private calculation right in your web browser that keeps your principal and interest figures on your device.
Simple Interest Formula and Calculation Logic
The Simple Interest Calculator calculates accrued interest and ending balances using the standard simple interest formula:
I = P × r × t
Where I is total interest accrued, P is starting principal, r is the annual interest rate in decimal form (rate / 100), and t is time in years.
For monthly terms, time is calculated as t = months / 12. Daily loans apply either the exact calendar day convention (t = days / 365) or the commercial Banker's Rule (t = days / 360).
The total maturity balance (A) equals the starting principal plus all accumulated interest:
A = P + I = P × (1 + r × t)
Each period is rounded to the nearest cent so your starting principal and accrued interest always add up to the exact ending balance (A = P + I).
Developed and maintained by the ValuNox team, this calculator follows standard banking simple interest formulas and commercial day-count conventions.
Financial Disclaimer
Results are for educational and estimation purposes only, not formal financial, tax, or legal advice. Actual loan payoffs and deposit yields depend on lender terms, exact day-count rules, and payment schedules.
Example Calculation
Example Input
Starting Principal: $10,000.00 Annual Interest Rate: 6.00% Term / Duration: 5 Years Time Unit: Years
Example Output
Total Interest Accrued: $3,000.00 Ending Balance: $13,000.00 Annual Interest Payout: $600.00
With simple interest, earnings remain constant at $600.00 per year, yielding $3,000.00 over five years because interest is paid only on the initial $10,000.00 principal.
Frequently Asked Questions
What is the difference between simple interest and compound interest?
Simple interest is calculated only on your starting principal for the entire loan or deposit term. Compound interest charges or pays interest on both your principal and past interest, making the balance grow faster over time.
When is simple interest typically used in real financial markets?
Simple interest is standard in short-term personal loans, automobile financing, commercial paper, and Treasury bills. It also applies to certificate of deposit (CD) payouts where interest is distributed directly rather than reinvested.
What is the difference between 365-day and 360-day Banker's Rule conventions?
The exact day convention divides calendar days by 365, reflecting standard calendar time. The 360-day Banker's Rule assumes twelve 30-day months, which slightly increases daily interest on short-term commercial loans.
Does simple interest ever increase your principal balance?
No, simple interest is never added back into your principal to generate additional interest. Your principal balance stays fixed for the entire term, while earned interest is tracked separately to form the final payoff balance.
How do partial-year loan terms or early payoffs affect total interest?
Simple interest grows in direct proportion to time. If you pay off a simple interest loan early, you only pay interest for the exact months or days you held the money.
Are my principal and interest numbers kept private?
Yes, all simple interest calculations run directly inside your web browser. Your principal amount, interest rate, and payoff schedule stay on your device and are never shared or stored online.