Simple Interest Calculator
Calculate simple interest on loans, deposits, and investments
Interest Calculation
₹
The initial amount of money
%
Annual interest rate
Duration of the investment or loan
Interest Summary
Enter the principal, rate, and time to calculate simple interest
Simple Interest Guide
What is Simple Interest?
Simple interest is a method of calculating interest where the interest is computed only on the principal amount. It doesn't compound, meaning you don't earn interest on interest.
Formula:
SI = (P × R × T) / 100
- • SI = Simple Interest
- • P = Principal Amount
- • R = Rate of Interest (% per annum)
- • T = Time Period (in years)
Common Applications:
- • Personal Loans: Some banks use simple interest for short-term loans
- • Car Loans: Many auto loans use simple interest calculation
- • Short-term Deposits: Fixed deposits for shorter periods
- • Savings Accounts: Basic savings account interest calculation
Simple vs Compound Interest:
Simple Interest
Interest calculated only on principal amount
Compound Interest
Interest calculated on principal + previously earned interest
Example 1: Personal Loan
Principal: ₹50,000
Rate: 15% per annum
Time: 2 years
Interest: ₹15,000
Total: ₹65,000
Example 2: Fixed Deposit
Principal: ₹1,00,000
Rate: 7% per annum
Time: 3 years
Interest: ₹21,000
Total: ₹1,21,000
Example 3: Short-term Investment
Principal: ₹25,000
Rate: 12% per annum
Time: 18 months
Interest: ₹4,500
Total: ₹29,500