Simple interest is a quick way to calculate interest earned or owed on a loan or investment when the interest does not compound. The standard formula is: SI = P × R × T

• P = principal (the starting amount)
• R = annual interest rate (as a decimal; e.g., 5% = 0.05)
• T = time the money is borrowed or invested (in years)

If you prefer to use percentages directly, you can use: SI = (P × R × T) / 100 How to use it

• Identify the principal (P), the annual rate (R in percent), and the time period in years (T).
• Plug into the formula and multiply: P × R × T, then divide by 100 if R is in percent.
• The total amount repaid or accumulated after the period is A = P + SI.

Example

• Principal: $1,000
• Rate: 5% per year
• Time: 3 years

SI = (1000 × 5 × 3) / 100 = 150
A = 1000 + 150 = 1150 Tips

• The formula assumes simple interest, not compound interest.
• For non-integer years, use T in years as a decimal (e.g., 2.5 years). The same formula applies: SI = P × R × T / 100.

If you have a specific problem (values for P, R, and T), share them and can compute the exact simple interest and total amount.