Simple Interest Calculator
Simple interest is charged only on the original principal, never on accumulated interest. Enter the principal, annual rate and period in years to see the interest and the total.
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Calculator and results
Simple interest on ₹1,00,000 at 8% a year for 3 years is ₹24,000, making a total of ₹1,24,000.
Enter months as a decimal: 18 months is 1.5 years.
Interest
₹24,000
Principal
₹1,00,000
Total amount
₹1,24,000
Per year
₹8,000
Principal vs interest
- Principal
- 80.6%
- ₹1,00,000
- Total interest
- 19.4%
- ₹24,000
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- What it is:
- A simple interest calculator.
- What it calculates:
- Interest charged on the principal alone, and the total payable or receivable.
Key Assumptions
- Interest never compounds.
- The rate is annual and the period is in years.
- Tax on interest income is not applied.
How does the Simple Interest Calculator work?
Because interest never compounds, the amount earned or charged is the same in every period.
Simple interest appears in short-term lending, some gold loan schemes and in the interest that accrues on an education loan during a moratorium. Most bank loans and deposits use compounding instead.
The formula is SI = P × R × T ÷ 100, where P is the principal, R the annual rate in percent and T the time in years. For a period in months, divide the months by 12 to get T.
Worked example: ₹1,00,000 at 8% a year for 3 years gives ₹1,00,000 × 8 × 3 ÷ 100 = ₹24,000 of interest, ₹1,24,000 in all. For a shorter period, ₹50,000 at 12% for 9 months is ₹50,000 × 12 × 0.75 ÷ 100 = ₹4,500.
Simple interest is used for some short personal loans, interest on a loan between family members, and some savings and government schemes that pay interest out rather than adding it back. Bank deposits and most loans compound instead: compare the two with the Compound Interest Calculator, and for loan instalments use the EMI Calculator.
Simple vs compound interest on ₹1,00,000 at 8%
| Period | Simple interest | Compound interest (yearly) |
|---|---|---|
| 1 year | ₹8,000 | ₹8,000 |
| 3 years | ₹24,000 | ₹25,971 |
| 5 years | ₹40,000 | ₹46,933 |
| 10 years | ₹80,000 | ₹1,15,893 |
Simple interest is P × R × T ÷ 100. Compound interest here is added once a year. The gap widens the longer the money is left.
Simple Interest Calculator formula
SI = P x R x T / 100
- P
- = principal
- R
- = annual rate of interest in percent
- T
- = time in years
Simple Interest Calculator: worked example
₹1,00,000 at 8% simple interest for 3 years
- Principal
- ₹1,00,000
- Interest per year
- ₹8,000
- Total interest
- ₹24,000
- Total amount
- ₹1,24,000
Simple Interest Calculator: frequently asked questions
How is simple interest different from compound interest?
Where is simple interest actually used?
Can I enter a period in months?
What is the simple interest formula?
How do I calculate simple interest for months?
Further reading
Why a flat 10% and a reducing-balance 10% are not the same loan, how much more the flat structure costs, and where you meet it in India.
The reducing-balance EMI formula Indian lenders use, what each symbol means, how to compute it yourself, and how to handle the 0% case.
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Reviewed by Pradipta Ray, MBA (Finance) · Updated