Simple Interest Calculator
Calculate simple interest easily with our free calculator — just multiply principal, rate, and time.
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At a glance
Total Amount (Principal + Interest)
₹1,40,000
Simple interest is the most straightforward way to calculate the cost of borrowing or the return on an investment. See how it compares to the compound interest calculator for longer time horizons, or check your loan EMI using the reducing balance method.
Simple Interest Calculation Examples
| Principal | Rate | Time | Simple Interest | Total Amount |
|---|---|---|---|---|
| ₹50,000 | 6% | 1 year | ₹3,000 | ₹53,000 |
| ₹1,00,000 | 8% | 3 years | ₹24,000 | ₹1,24,000 |
| ₹5,00,000 | 10% | 5 years | ₹2,50,000 | ₹7,50,000 |
| ₹10,00,000 | 7.5% | 2 years | ₹1,50,000 | ₹11,50,000 |
| ₹25,00,000 | 9% | 10 years | ₹22,50,000 | ₹47,50,000 |
Simple vs Compound Interest — Key Differences
Simple Interest
Calculated only on the principal. Linear growth — interest remains constant each year. Used for short-term loans and some bonds.
Compound Interest
Calculated on principal + accumulated interest. Exponential growth — interest grows each period. Used for long-term investments.
Simple Interest Comparison: ₹1 Lakh at Different Rates & Tenures
| Tenure | 6% SI | 8% SI | 10% SI | 12% SI |
|---|---|---|---|---|
| 1 year | ₹6,000 | ₹8,000 | ₹10,000 | ₹12,000 |
| 3 years | ₹18,000 | ₹24,000 | ₹30,000 | ₹36,000 |
| 5 years | ₹30,000 | ₹40,000 | ₹50,000 | ₹60,000 |
| 10 years | ₹60,000 | ₹80,000 | ₹1,00,000 | ₹1,20,000 |
Unlike compound interest, simple interest grows linearly — the interest amount is the same each year. At 10% on ₹1L, you earn ₹10,000 every year.
How to Calculate Simple Interest
In plain words
Simple interest is the most basic way to calculate interest — it is calculated only on the original principal amount. Unlike compound interest, interest is not earned on previously accumulated interest. Simple interest is commonly used for short-term loans, car loans, and education loans in India.
SI = (P × R × T) / 100
A = P + SI
Where:
SI = Simple Interest
P = Principal Amount
R = Annual Interest Rate (in %)
T = Time Period (in Years)
A = Total Amount (Principal + Interest)A quick example
Let us calculate simple interest for a typical loan:
Step by step
- 1.SI = (1,00,000 × 8 × 3) / 100
- 2.SI = 24,00,000 / 100
- 3.SI = ₹24,000 total interest
- 4.Total Amount = 1,00,000 + 24,000 = ₹1,24,000
- 5.Annual interest = ₹24,000 / 3 = ₹8,000 per year
So the answer is: Simple Interest = ₹24,000 | Total Amount = ₹1,24,000 | Effective Yield: 8% p.a.