How to calculate simple interest
✓ Verified in LibreOffice 25.8.7.3Interest that doesn't compound — flat-rate loans, short-term notes, bonds' accrued interest.
The formula
| App | Formula | Notes |
|---|---|---|
| Excel | =A2*B2*C2 | A2=principal, B2=annual rate, C2=years. Total repayment: =A2*(1+B2*C2). |
| Google Sheets | =A2*B2*C2 | Identical. |
| LibreOffice Calc | =A2*B2*C2 | Identical. |
How it works
Simple interest is principal × rate × time: $5,000 at 4% for 3 years earns $600, because the interest never joins the principal. Compare with compounding (see the compound-interest recipe): the same money compounded monthly grows by $637 — the gap widens with time and rate. Partial years just go in as fractions: 90 days is C2 = 90/365 (or /360 under some loan conventions — check the contract).
Verified, not just documented
We ran =A2*B2*C2 in LibreOffice 25.8.7.3 (headless, with forced recalculation) and it returned 600 — exactly the expected result. Every formula here is confirmed by actually executing it.