Calculate simple interest earned or owed on a principal amount over a given time period.
A simple interest calculator works out the interest earned (or owed) on a principal amount over a given time period, where interest is calculated only on the original principal — not on previously accumulated interest. This is different from compound interest, where interest is added to the balance and itself earns interest in future periods.
Simple interest grows in a straight line — the same amount of interest accrues each year, calculated on the original principal only, regardless of how long the money has been invested or borrowed.
Formula: Interest = Principal × (Annual Rate ÷ 100) × Time (in years). Total Amount = Principal + Interest.
Example: A £10,000 principal at a 5% annual interest rate (example rate — enter the actual rate that applies to your situation) over 3 years earns £1,500 in interest (£10,000 × 0.05 × 3), for a total amount of £11,500. (Note: this example is for illustration purposes only.)
Most everyday UK savings accounts, mortgages, and loans use compound interest rather than simple interest — interest is typically calculated on the balance (including previously added interest) and compounded daily, monthly, or annually. However, simple interest still appears in certain contexts, such as some short-term loans, certain bonds, court-awarded interest on late payments, and in basic financial education to illustrate the core concept of interest before introducing compounding. If you're trying to estimate growth on a savings account or the cost of a typical loan, the Compound Interest Calculator or Loan Calculator will usually give a more accurate picture, as most UK financial products compound interest rather than applying it on a simple basis.
Simple interest is calculated only on the original principal, so the interest amount is the same every period. Compound interest is calculated on the principal plus any interest already added, so the interest amount grows over time. Most UK savings accounts and loans use compound interest.
Simple interest is less common than compound interest for everyday savings and loans, but it can appear in certain short-term loans, some bonds, court-awarded interest on overdue payments, and educational examples. Always check the specific terms of a financial product to confirm how interest is calculated.
This is the defining feature of simple interest — it's calculated only on the original principal, so the same interest amount applies to every year of the term. If you expected interest to compound (grow on previously earned interest), use the Compound Interest Calculator instead.
Yes — the formula works the same way whether you're calculating interest earned on savings or interest owed on a loan, as long as the loan in question uses simple interest. Most everyday UK loans (including mortgages and personal loans) use amortising interest, which is closer to compound interest — for those, use the Loan Calculator or Amortization Calculator.
Yes. Enter the time period in years, using a decimal for partial years — for example, 18 months would be entered as 1.5 years, and 6 months would be 0.5 years. The formula scales proportionally with time.
No. This calculator shows the gross interest earned before any tax. In the UK, savings interest may be subject to Income Tax above your Personal Savings Allowance, depending on your total income and other savings interest received in the tax year.
Disclaimer: The information and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. This calculator assumes a simple (non-compounding) interest calculation, which may not match the actual terms of a specific savings account, loan, or financial product. Always check the terms of any financial product to confirm how interest is calculated, and consult a qualified financial adviser if needed.