Simple Interest Calculator
Simple interest is charged only on the original amount, never on interest already earned. Enter the principal, rate and period to see the interest and the total repayable.
Principal
₹1,00,000
Simple interest
₹40,000
Total amount
₹1,40,000
The same money at compound interest would reach ₹1,46,933 instead of ₹1,40,000, a difference of ₹6,933.
Simple interest is charged only on the original principal: SI = P × R × T ÷ 100. Most bank deposits and loans use compound interest instead.
Frequently Asked Questions
What is the simple interest formula?
SI = P × R × T ÷ 100, where P is the principal, R the annual rate as a percentage and T the time in years. The total amount you get back is P + SI.
Where is simple interest actually used?
Car and two-wheeler loans from some lenders, short-term personal borrowing, gold loans with bullet repayment, and most informal lending. Bank deposits and home loans use compound interest.
Why is compound interest higher?
Because compound interest earns interest on interest. Over one year the two are almost identical; over twenty years at 8%, compound interest produces well over twice as much.
How do I calculate simple interest for months or days?
Convert to a fraction of a year. Six months is 0.5 years, 90 days is roughly 0.25 years. Enter that as the time period.