Simple Interest Calculator
The classic SI = PRT/100 formula, done for you. Good for short-term loans, fixed deposits, and any situation where interest doesn't compound. Enter principal, rate, and time and you'll see the interest earned and total amount.
How to use
- Enter the principal - the starting amount of money.
- Put in the annual interest rate as a percentage.
- Enter how long for, and choose years or months.
- Click Calculate to see what interest you'll earn and the final total.
Related tools:
Simple interest is calculated only on the original principal and does not compound. The formula is: SI = (P × R × T) / 100, where P is the principal amount, R is the annual interest rate in percent, and T is the time in years. The total amount payable is A = P + SI.
Simple interest is used in short-term loans, some government schemes, and situations where interest is paid out regularly rather than reinvested. If you borrow ₹50,000 at 8% for 3 years, the interest is ₹12,000 (₹4,000/year), and you repay ₹62,000 in total. Because interest does not compound, the cost is predictable and linear, making it easier to plan repayments compared to compound interest loans.
Frequently Asked Questions
When is simple interest used in real life?
Short-term personal loans, some car loan schemes, post office savings certificates, gold loans, and some microfinance loans use simple interest. Banks sometimes quote simple interest for short tenures (under 1 year) to make comparisons easier.
What is the difference between simple and compound interest?
With simple interest, the interest amount stays the same each period. It is always calculated on the original principal. With compound interest, each period's interest is added to the principal, so the base grows and interest earned increases each period.
How do I convert an annual rate to a monthly simple interest rate?
Divide the annual rate by 12. At 12% per annum, the monthly simple interest rate is 1% of the principal. Over 6 months at 12% p.a., SI = P × 12 × 0.5 / 100 = 6% of principal.
Can I use this to calculate interest on a fixed deposit?
Only if the FD explicitly uses simple interest. Some very short-term FDs (under 6 months) do. Most standard FDs compound quarterly, so the compound interest calculator will give you a more accurate result for those.