Written and reviewed by FormulaCraft Team. Each formula on this page is run through our verification engine before publishing.
Last reviewed:
How to calculate simple interest in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=A2*B2*C2✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Principal | Rate | Years | Interest |
| 1000 | 0.05 | 3 | |
| 5000 | 0.08 | 2 | |
| 2500 | 0.06 | 1 | |
| 10000 | 0.04 | 5 |
=A2*B2*C2→150
Try it with your data
Edit the grid or formula, then run it through a real spreadsheet engine — no signup.
Sample data — click any cell to edit
Runs server-side · free · no signup
Step by step
- 1Set up your spreadsheet with three columns: Principal (A), Annual Rate as a decimal (B), and Time in years (C).
- 2In the Interest column, enter =A2*B2*C2. This implements the Simple Interest formula: I = P × r × t.
- 3Format the result as Currency. To also calculate the total repayment, add a column with =A2+(A2*B2*C2) for Principal + Interest.
Tips
- Enter the rate as a decimal (e.g., 0.05 for 5%) rather than a percentage to avoid needing to divide by 100 in the formula.
Working on a sheet you inherited? Run the Auditor on the whole file first — it flags every #REF!, #N/A, broken column pattern, and inconsistent formula in seconds, free, no signup.
Frequently asked
How is simple interest different from compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus accumulated interest each period.
What if my time period is in months?
Divide the months by 12 in your formula: =A2*B2*(C2/12), where C2 holds the number of months.
More on Finance basics
See all →How-to
How to calculate compound interest
Calculate a compounded closing balance from principal, annual nominal rate, compounding frequency and years, then separate the interest earned.
How-toHow to calculate the effective annual interest rate
Convert a positive nominal annual rate and a whole-number compounding frequency into an effective annual rate with EFFECT.
How-toHow to calculate the break-even point in units
Divide fixed costs by unit contribution margin and round up to whole units, with an explicit message when the margin is nonpositive.
How-toHow to calculate tiered commission
Apply different commission rates by sales tier using IFS. Works in Excel 2019/365 and Google Sheets.
How-toHow to calculate net pay
Calculate take-home (net) pay by subtracting every deduction from gross salary, with worked examples for fixed amounts, percentage tax, and slab-based tax. Excel and Google Sheets.
How-toHow to calculate gross margin
Compute gross margin percentage as (price − cost) / price. Identical in Excel and Google Sheets.