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Simple Interest Calculator

Calculate simple interest on your loans or investments instantly. Free, accurate, and easy to use.

Enter Details

₹
₹1,000₹1Cr
0.1%50%
1 Year30 Years

Calculation Results

Principal Amount₹1,00,000
Total Interest₹20,000
Total Amount₹1,20,000

Breakdown

20.0%
Interest Earned
Principal (83.3%)
Interest (16.7%)

Simple Interest Formula

SI = (P × R × T) / 100
  • SI = Simple Interest
  • P = Principal Amount (₹1,00,000)
  • R = Rate of Interest per annum (10%)
  • T = Time Period in years (2.00 years)

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Learn About Simple Interest

What is Simple Interest?

Simple interest is a method of calculating the interest charge on a loan or the return on an investment. It is called "simple" because it only considers the original principal amount when calculating interest, unlike compound interest which calculates interest on both the principal and accumulated interest.

When to Use Simple Interest

Short-term Loans

Personal loans, car loans, and some mortgages use simple interest

Bonds

Many bonds pay simple interest to investors

Certificates of Deposit

Some CDs use simple interest calculations

Consumer Loans

Credit card minimum payments often use simple interest

Simple Interest vs Compound Interest

The main difference is that simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest already earned. For borrowers, simple interest is generally more favorable. For investors, compound interest leads to higher returns over time.