Calculate simple interest on your investments or loans quickly.
Simple Interest = (Principal × Rate × Time) / 100
All slider inputs, expected returns, interest rates, and custom goals are saved in this unique URL. Bookmark this page or share the link with others to show your plan.
Simple interest is interest calculated only on the original principal. The interest does not get added back to the principal for future interest calculation. This makes simple interest easy to understand and useful for quick estimates on short-term lending, delayed payments, and basic interest agreements.
In practice, many bank deposits and long-term investments use compound interest instead. Use this calculator when the interest agreement clearly says simple interest, or when you want a rough first estimate before using a more detailed EMI, FD, or compound interest calculator.
SI = (P * R * T) / 100
Where P = Principal, R = Rate per annum, T = Time in years.
Enter the principal amount, annual interest rate, and time period. The calculator shows the simple interest earned or payable, along with the total amount at the end of the period.
Simple interest is useful when interest is charged only on the original principal and does not compound. This makes it easier to understand than compound interest, but it is less common in long-term investment products.
Simple Interest = (Principal x Rate x Time) / 100
Total amount is:
Total Amount = Principal + Simple Interest
For example, if you invest ₹1,00,000 at 8% simple interest for 3 years:
SI = 1,00,000 x 8 x 3 / 100 = ₹24,000
The total amount will be:
₹1,00,000 + ₹24,000 = ₹1,24,000
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Interest base | Original principal only | Principal plus accumulated interest |
| Growth | Straight-line | Accelerating |
| Calculation | Easier | More powerful over time |
| Best for | Short-term loans or basic interest estimates | Long-term investments |
If you are planning long-term savings, compound interest is usually more relevant. If you are checking a short-term loan, delayed payment, or basic interest charge, simple interest may be enough.
Simple interest may be used in some personal loans, short-term lending, informal borrowing, invoice delays, late payment charges, and educational examples. It is also useful for quickly estimating the cost of borrowing before looking at more detailed EMI schedules.
Assume the principal is ₹2,00,000 and the annual interest rate is 9%.
| Tenure | Simple Interest | Total Amount |
|---|---|---|
| 6 months | ₹9,000 | ₹2,09,000 |
| 1 year | ₹18,000 | ₹2,18,000 |
| 2 years | ₹36,000 | ₹2,36,000 |
| 3 years | ₹54,000 | ₹2,54,000 |
The interest increases in a straight line because the calculation base remains ₹2,00,000 for the full period. In compound interest, the base would rise as interest is added back.
Avoid using simple interest for products where compounding, reducing balance, or monthly amortisation matters. For example, home loans and personal loans usually follow a reducing-balance EMI schedule. Cumulative FDs compound interest quarterly or at another stated frequency. SIP and mutual fund returns are market-linked and need a future value calculation.
Simple interest is interest calculated only on the original principal amount.
Simple interest does not reinvest earned interest. The calculation base remains the original principal for the full tenure.
For borrowers, simple interest is usually cheaper. For investors, compound interest usually creates more wealth over time.
Most cumulative FDs use compound interest, so an FD calculator is more accurate.
Convert the time period into years. For example, 6 months is 0.5 years.
The formula can technically use a negative rate, but most real-world loan and deposit agreements use positive interest rates. Negative returns are more relevant for market-linked investments, not simple-interest contracts.
Provide interactive financial planning directly for your blog or news audience.