Simple Interest Calculator
Calculate simple interest on loans and deposits with principal, rate, and time.
Results are for informational purposes only and do not constitute financial advice. Consult a financial advisor for personalised guidance.
Simple Interest
Total Amount
Formula Used
SI = P × R × T / 100
How It Works
Enter the principal amount, annual interest rate, and time period. The calculator shows the simple interest earned or payable and the total amount.
**Simple Interest Calculator — Quick Interest Calculations**
Simple interest is the most straightforward form of interest calculation, widely used for short-term loans, auto loans, and some personal loans. Unlike compound interest, simple interest is calculated only on the original principal — not on accumulated interest.
**Simple Interest Formula**
SI = P × R × T / 100
Where:
- SI = Simple Interest
- P = Principal amount
- R = Annual interest rate (%)
- T = Time in years
Total Amount = P + SI
**When is Simple Interest Used?**
- Short-term personal loans
- Auto loans (in the US, most car loans use simple daily interest)
- Some mortgage products
- Pawn shop loans
- US Treasury bills and bonds
- Savings bonds (some types)
**Simple vs Compound Interest**
For a ₹1,00,000 loan at 10% for 3 years:
- Simple Interest: ₹30,000 (total repayment: ₹1,30,000)
- Compound Interest (annual): ₹33,100 (total repayment: ₹1,33,100)
The difference grows significantly with longer tenures, which is why lenders prefer compound interest for long-term products like mortgages.
**Practical Examples**
*Scenario 1:* You deposit ₹50,000 in a fixed deposit at 7% per annum for 2 years.
SI = 50,000 × 7 × 2 / 100 = ₹7,000
Maturity amount = ₹57,000
*Scenario 2:* You take a personal loan of ₹2,00,000 at 15% for 18 months.
SI = 2,00,000 × 15 × 1.5 / 100 = ₹45,000
Total repayment = ₹2,45,000
**Tips**
1. For savings, always choose compound interest accounts over simple interest.
2. For loans, simple interest products may cost less than compound interest products with the same stated rate.
3. Always verify with your bank whether interest is simple or compound — the type significantly affects the total cost.