Simple Interest Calculator
Work out the simple interest and total amount on a loan or deposit using SI = P × R × T ÷ 100. Enter the principal, annual rate and time in years, months or days.
Simple vs compound interest — on your numbers
| Interest | Total amount | |
|---|---|---|
| Simple interest | ₹5,000 | ₹15,000 |
| Compound (annual) | ₹6,105 | ₹16,105 |
| Compound earns extra | ₹1,105 more than simple over this term | |
Compound figures assume interest is compounded once per year. At exactly one year both are equal; beyond that, compound interest pulls ahead.
Year-by-year breakdown
| Year | Interest this year | Interest so far | Balance |
|---|---|---|---|
| 1 | ₹1,000 | ₹1,000 | ₹11,000 |
| 2 | ₹1,000 | ₹2,000 | ₹12,000 |
| 3 | ₹1,000 | ₹3,000 | ₹13,000 |
| 4 | ₹1,000 | ₹4,000 | ₹14,000 |
| 5 | ₹1,000 | ₹5,000 | ₹15,000 |
With simple interest the same amount is added every year, so the balance rises in a straight line.
Simple interest on ₹1,00,000 at various rates & durations
| Rate | 1 yr | 2 yr | 3 yr | 5 yr | 10 yr |
|---|---|---|---|---|---|
| 5% | ₹5,000 | ₹10,000 | ₹15,000 | ₹25,000 | ₹50,000 |
| 7.5% | ₹7,500 | ₹15,000 | ₹22,500 | ₹37,500 | ₹75,000 |
| 10% | ₹10,000 | ₹20,000 | ₹30,000 | ₹50,000 | ₹1,00,000 |
| 12.5% | ₹12,500 | ₹25,000 | ₹37,500 | ₹62,500 | ₹1,25,000 |
| 15% | ₹15,000 | ₹30,000 | ₹45,000 | ₹75,000 | ₹1,50,000 |
Interest only (principal not included). Recomputes with the selected currency symbol.
How simple interest is calculated
Simple interest is charged only on the original principal, so it is easy to work out with one formula:
SI = (P × R × T) ÷ 100
where P = principal (the amount borrowed or invested), R = interest rate per year as a percentage, and T = time in years. The total amount is A = P + SI = P × (1 + R × T ÷ 100). If your time is in months or days, convert it first: months ÷ 12 or days ÷ 365. The calculator does this automatically when you pick "Months" or "Days".
A worked example
Suppose you deposit ₹10,000 at 10% per year for 5 years:
- SI = 10,000 × 10 × 5 ÷ 100 = ₹5,000
- Total amount = 10,000 + 5,000 = ₹15,000
- Each year adds the same ₹1,000 (₹10,000 × 10 ÷ 100), so after 3 years the interest is ₹3,000 and after 5 years it is ₹5,000 — a straight line.
That last point is the whole idea: because interest is never added to the principal, every year contributes the same fixed amount. Change any input above and the interest, total and the year-by-year table update instantly.
Simple interest vs compound interest
The single most important thing to understand about interest is what it is charged on. Simple interest is always calculated on the original principal, so it adds the same amount every period and grows in a straight line. Compound interest is calculated on the principal plus the interest already earned, so it earns "interest on interest" and curves upward, accelerating over time.
Over a single year with annual compounding, the two are identical — a 10% rate on ₹10,000 adds ₹1,000 either way. The difference only appears from the second period onward, once there is accumulated interest for compounding to act on. The longer the term and the higher the rate, the bigger the gap. Over ₹10,000 at 10% for 5 years, simple interest totals ₹5,000 while annual compound interest is about ₹6,105 — the "Simple vs compound" panel above shows this on whatever numbers you enter.
As a borrower you generally prefer a simple-interest loan (you never pay interest on interest); as a saver you generally prefer compound interest (your returns snowball). Knowing which one a product uses is often more important than a small difference in the headline rate.
Where simple interest is used
- Car loans and many personal loans — often quoted and calculated on a simple-interest basis, so interest is charged on the outstanding principal rather than compounding.
- Short-term and bridge loans — a fixed interest amount over a few months is easy to state as simple interest.
- Some fixed deposits, certificates of deposit and Treasury bills — particularly short-tenure ones that pay interest at maturity rather than reinvesting it.
- School and exam maths — simple interest is taught first because the formula is direct and the growth is linear.
By contrast, savings accounts, credit cards, mortgages and most long-term investments use compound interest, because interest is charged or paid on the growing balance.
Tips and common mistakes
- Match the rate and time units. The formula expects an annual rate and time in years. If you know a monthly rate, multiply it by 12 to annualise, or keep the annual rate and convert the time (months ÷ 12, days ÷ 365).
- Interest is not the total. SI is only the interest earned or charged. What you actually repay or receive is principal + interest — read the "Total amount" box.
- Simple ≠ flat-rate APR. A loan quoted with a low "flat" or "simple" rate on the original amount can cost more than a higher compound/reducing-balance rate, because you keep paying interest on money you have already repaid. Compare the total amount, not just the rate.
- Day-count conventions vary. This tool uses 365 days per year. Some lenders use 360; over short periods the difference is small but real, so check the exact convention on a formal contract.
Frequently asked questions
What is simple interest?
Simple interest is interest calculated only on the original principal amount, not on any interest already earned. It grows in a straight line: the same fixed amount is added every period. The formula is SI = P × R × T ÷ 100, where P is the principal, R is the annual rate as a percentage and T is the time in years. Unlike compound interest — which earns "interest on interest" — simple interest never accelerates, which makes it easy to calculate and common in car loans, some personal loans, and fixed short-term deposits.
What is the simple interest formula?
SI = (P × R × T) ÷ 100, where P = principal (the amount borrowed or invested), R = rate of interest per year as a percentage, and T = time in years. The total amount you repay or receive is A = P + SI = P × (1 + R × T ÷ 100). For example, ₹10,000 at 10% per year for 5 years gives SI = 10,000 × 10 × 5 ÷ 100 = ₹5,000, so the total amount is ₹15,000. If your time is in months or days, convert it to years first (months ÷ 12, days ÷ 365) — the calculator above does this for you.
How do I calculate simple interest for months or days?
Keep the rate annual (per year) and convert the time to a fraction of a year: months ÷ 12 or days ÷ 365. For instance ₹10,000 at 10% for 6 months is 10,000 × 10 × 0.5 ÷ 100 = ₹500, and ₹20,000 at 9% for 146 days is 20,000 × 9 × (146 ÷ 365) ÷ 100 = ₹720. Just pick "Months" or "Days" in the Time unit dropdown and the calculator converts it automatically.
What is the difference between simple and compound interest?
Simple interest is always calculated on the original principal, so it adds the same amount each period and grows linearly. Compound interest is calculated on the principal plus all previously accumulated interest, so it earns "interest on interest" and grows faster over time. Over one year (with annual compounding) both give the same interest; beyond that, compound interest pulls ahead — and the gap widens the longer the term and the higher the rate. For ₹10,000 at 10% over 5 years, simple interest is ₹5,000 while annual compound interest is about ₹6,105. The comparison panel above shows the difference on your own numbers.
Where is simple interest actually used?
Simple interest is common in car loans and many personal or consumer loans, short-term or bridge loans, some certificates of deposit and fixed deposits, and Treasury bills. It is also the model taught first in school maths because it is straightforward. Most savings accounts, credit cards, mortgages and long-term investments use compound interest instead, because interest is charged or paid on the growing balance rather than only the original amount.
Is my data sent anywhere?
No. This calculator runs entirely in your browser using JavaScript. Your principal, rate and time never leave your device — nothing is uploaded to a server, stored or logged. You can even use it offline once the page has loaded.