Simple interest calculator
Enter the principal, the annual rate and the period – the simple interest calculator returns the interest and the total with the formula I = P × r × t worked out. Count time between two dates, in days, months or years, and pick the day-count basis your bank or contract uses.
Source: Gabler Banklexikon – Tageberechnungsmethode (30/360, act/360, act/365, act/act). Updated: .
How it is calculated
Simple interest formula
I = P × r × t: interest equals principal times the annual rate times the time in years. For days, t = days ÷ 365 (or 360). Example: 10,000 at 5% from January 1 to September 30, 2026 is 272 days, so I = 10,000 × 0.05 × 272/365 = 372.60, and the total is 10,372.60.
How to calculate simple interest between two dates
- Count the days: the end date minus the start date (the first day counts, the last does not).
- Divide by the days in a year for your day-count basis.
- Multiply by principal and rate.
| Day count | Days | Year | Interest in the example | Typical use |
|---|---|---|---|---|
| Actual/365 | 272 | 365 | 372.60 | personal loans, legal interest, savings |
| Actual/Actual | 272 | 365 or 366 | 372.60 | Treasury bonds |
| Actual/360 | 272 | 360 | 377.78 | commercial loans, money market |
| 30/360 | 269 | 360 | 373.61 | corporate bonds, textbook "ordinary interest" |
The 360-day year (banker’s rule) gives slightly more interest for the same number of days. The 30/360 row uses the European 30E/360 convention: a 31st is treated as the 30th.
Monthly simple interest
For months, t = months ÷ 12: 10,000 at 5% for 6 months earns 250. A monthly interest amount is P × r ÷ 12 = 41.67. Simple interest never adds interest to the balance, so every month earns the same.
In Excel: =10000*5%*(DATE(2026,9,30)-DATE(2026,1,1))/365 returns 372.60; =DAYS360(start,end,TRUE) counts 30/360 days.
Limits
This is simple interest only. If interest is credited and then earns interest itself, use the compound interest calculator. Loans with monthly payments reduce the balance, so interest must be worked out per period – the loan calculator does that.
Frequently asked questions
How do you calculate simple interest?
Multiply principal, annual rate and time in years: I = P × r × t. 5,000 at 4% for 3 years earns 5,000 × 0.04 × 3 = 600.
How do I calculate simple interest between two dates?
Count the days between the dates, divide by 365 (or 360 if your contract says so) and multiply by principal and rate. January 1 to September 30, 2026 is 272 days.
How do you calculate daily simple interest?
Daily interest = principal × annual rate ÷ 365. At 10,000 and 5% that is 1.37 per day; multiply by the number of days for the total.
What is the difference between simple and compound interest?
Simple interest is always calculated on the original principal. Compound interest adds earned interest to the balance, so later interest is paid on interest too. Over one period without crediting, both give the same result.
What is the 365/360 method?
The banker’s rule: actual days are counted, but the annual rate is divided by 360. That makes the effective rate slightly higher – 5% becomes about 5.07% over a full year.
Sources and legal basis
- Gabler Banklexikon – Tageberechnungsmethode (30/360, act/360, act/365, act/act)
- OpenStax Contemporary Mathematics – 6.3 Simple Interest (Rice University)
As of:
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