Simple Interest Calculator

Simple interest is calculated only on the original principal amount, not on accumulated interest. Formula: SI = P × R × T ÷ 100, where P = principal, R = annual rate %, T = time in years. Unlike compound interest, the interest amount is the same every period.

SI = (P × R × T) ÷ 100. Total Amount = P + SI = P × (1 + RT/100). Where P = Principal, R = Annual Rate of Interest (%), T = Time in years. If time is in months, divide by 12; if in days, divide by 365.

Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus accumulated interest. On ₹1,00,000 at 10% for 3 years: SI = ₹30,000 (same every year). CI = ₹33,100 (grows each year as interest compounds). Compound interest always yields more over time.

Simple interest is used in: short-term personal loans, car loans (some lenders), US Federal Student Loans, hire purchase agreements, certain fixed deposits (calculated annually, paid annually), and Treasury bills. Most long-term loans and savings use compound interest.

Convert months to years: T = months ÷ 12. Example: SI for 6 months at 8% on ₹50,000 = ₹50,000 × 8 × (6/12) ÷ 100 = ₹2,000. Alternatively, use the daily rate: Monthly SI = P × (R/100) × (days/365).

EMI = (P + Total SI) ÷ (T × 12). Example: ₹1,00,000 at 10% SI for 2 years: Total SI = ₹20,000. Total amount = ₹1,20,000. EMI = ₹1,20,000 ÷ 24 = ₹5,000/month. Note: most bank loans use reducing-balance compound interest (EMI formula), not simple interest.

P = (SI × 100) ÷ (R × T). Example: If SI is ₹6,000 at 8% for 3 years: P = (6000 × 100) ÷ (8 × 3) = ₹25,000.

R = (SI × 100) ÷ (P × T). Example: ₹10,000 earns ₹3,000 in 5 years: R = (3000 × 100) ÷ (10000 × 5) = 6% p.a.

Bank Fixed Deposits in India use compound interest (quarterly compounding by default). However, the effective annual return (if interest is paid out annually and not reinvested) behaves like simple interest year-on-year. Our FD/compound calculator gives exact FD maturity values.

For simple interest, money doubles when SI = P, i.e., when R × T = 100. So doubling time = 100 ÷ R years. At 10% SI, money doubles in 10 years. Note: with compound interest (Rule of 72), money doubles in 72/R years — faster than simple interest at the same rate.