Calculate simple interest forward (future value) or backward (required rate or time to goal). Includes a comparison chart vs. compound interest showing what you lose without compounding.
Simple interest is calculated only on the original principal — it does not compound. It is used for most short-term loans, car loans, and some savings bonds. Compound interest is always more powerful for growing wealth (because you earn interest on interest), but simple interest is fairer for short-term borrowing. Car dealers often advertise simple interest loans which can still be expensive when expressed as APR.