Simple Interest Calculator
Simple interest is calculated only on the original amount you borrowed or deposited. Unlike compound interest, the interest earned in earlier years does not earn any further interest, so it grows by the same amount every year.
Simple Interest Calculator
Example values are shown to start with. Change them to your own numbers. Everything is calculated in your browser.
Enter the principal, the yearly rate and the number of years. The calculator shows the interest and the total amount. Many short-term loans and some personal arrangements use simple interest, and it is also the easiest way to compare against compound interest.
Worked example
With the starting values below, the calculator gives the results in the second table.
| Principal | ₹1,00,000 |
|---|---|
| Rate per year | 8% |
| Years | 3 |
| Interest | ₹24,000.00 |
|---|---|
| Total amount | ₹1,24,000.00 |
How to use this calculator
- Enter the principal amount.
- Enter the interest rate per year.
- Enter the number of years.
- Read the interest and the total amount.
Formula
- P is the principal.
- R is the yearly rate in percent.
- T is the time in years.
Assumptions
- The rate and the principal stay the same for the whole period.
- Interest is not added back to the principal.
Limitations
- Most bank loans and deposits use compound or reducing-balance interest, so simple interest is only right when the terms say so.
Frequently asked questions
What is the formula for simple interest?
Simple interest = P × R × T ÷ 100, with P the principal, R the yearly rate in percent and T the years.
How is simple interest different from compound interest?
Simple interest is earned only on the original principal. Compound interest is earned on the principal plus the interest already added, so it grows faster over time.
Can I use months instead of years?
Yes. Convert months to years first: 6 months is 0.5 years.
Which is more common, simple or compound?
Bank deposits and most loans use compounding or reducing balance. Check your agreement.
Related calculators
- EMI CalculatorMonthly EMI, total interest and total payment for any loan.
- FD CalculatorMaturity amount and interest on a fixed deposit.
- Compound Interest CalculatorGrowth of savings with regular monthly contributions.
Sources and method
Simple interest is the standard formula. See how our calculators work.
Results are estimates for planning only and are not financial, tax or legal advice. Rates, rules and your own circumstances can change the outcome. Read our disclaimer.