Simple interest calculator

Simple interest is always worked out on the original principal: interest is not added to the balance during the term.

It is used for short deposits, loans between people and plenty of homework problems.

How it's calculated

Interest = principal × annual rate × time in years.
For months, divide by 12. For days, divide by 365 or 360, depending on the year the bank uses.
Total = principal + interest.

KWD 300 at 10% a year for 6 months earns KWD 15 in interest.

The same principal for 90 days earns KWD 7.397 with a 365 day year and KWD 7.500 with a 360 day year.

What is the simple interest formula?

I = P × r × t. P is the principal, r the annual rate as a decimal (10% is 0.10) and t the time in years.

How is it different from compound interest?

Simple interest is always worked out on the same principal. With compound interest, interest is added to the balance and earns interest too.

Why do some banks use a 360 day year?

It is a banking convention that makes the math easier. With 360 days the interest comes out a little higher. Check which one your bank uses.

Up-to-date official data

We check the official sources automatically, every day.