Calculate simple interest on your loan or investment instantly — completely free.
| Year | Principal | SI Earned | Total Amount |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹10,000 | ₹1,10,000 |
| 3 | ₹1,00,000 | ₹30,000 | ₹1,30,000 |
| 5 | ₹1,00,000 | ₹50,000 | ₹1,50,000 |
Calculating simple interest takes less than a minute:
The calculator gives you an instant breakdown without any manual calculation errors.
Simple interest is the most basic method of calculating interest — it is computed only on the original principal amount, throughout the entire loan or investment period. Unlike compound interest, the interest earned or charged in previous periods does not get added to the principal for future calculations.
This means the interest amount remains the same every year, resulting in a linear growth pattern rather than an exponential one.
Simple interest is calculated using the following formula:
SI = (P × R × T) / 100
Where:
For example, if you invest ₹1,00,000 at an annual interest rate of 8% for 5 years, the simple interest earned would be ₹40,000, making the total amount ₹1,40,000.
The key difference between the two lies in how interest accumulates over time:
Simple interest is commonly used for short-term loans, certain fixed deposits, and basic lending products, while compound interest is more common for long-term investments and savings accounts.
Simple interest is typically used in scenarios such as:
Our calculator helps you quickly understand your loan or investment by allowing you to:
Simple interest is interest calculated only on the original principal amount throughout the loan or investment period. Unlike compound interest, it does not add previously earned interest back into the principal.
Simple interest is calculated using the formula SI = (P × R × T) / 100, where P is the principal amount, R is the annual interest rate, and T is the time period in years.
Simple interest is calculated only on the principal, resulting in constant interest each year. Compound interest is calculated on the principal plus accumulated interest, resulting in growing interest amounts over time.
It depends on whether you are borrowing or investing. As a borrower, simple interest is usually better since you pay less over time. As an investor, compound interest is better since your returns grow faster.
Simple interest is commonly used for short-term loans, certain fixed deposits, and basic lending products where straightforward, predictable interest calculations are preferred.