Simple Interest Calculator
Interest = principal × rate × time — the linear one, computed live.
How this is calculated
Interest = P × (rate ÷ 100) × years · Final = P + Interest
Worked example: R5,000 at 7% for 4 years → 5,000 × 0.07 × 4 = R1,400 interest, final value R6,400. The third result line shows the same terms compounded monthly — the honest comparison, because most savings products compound and most contract penalties don't.
Frequently asked questions
What is the simple interest formula?
Interest = P × r × t: principal times the annual rate times the years. R5,000 at 7% for 4 years earns 5,000 × 0.07 × 4 = R1,400, for a final value of R6,400. Nothing compounds — the interest itself never earns interest.
When is simple interest actually used?
Short-term personal loans, some vehicle finance, bonds sold at a discount, and most "interest on arrears" clauses in contracts. Anything bank-account-like almost always compounds instead — if you are comparing savings options, use the compound interest calculator.
How different is it from compound interest?
Over short periods, barely; over long ones, enormously. R10,000 at 8% for 10 years is R18,000 simple but R22,196 compounded monthly. The gap is the interest-on-interest that simple interest never earns.
Does the term have to be whole years?
No — enter 0.5 for six months or 1.25 for fifteen months. The formula is linear in time, so partial years scale exactly.