Simple Interest Calculator
Calculate simple interest, total amount and interest earned. Formula: SI = P × R × T / 100.
About this calculator
Simple interest is the easiest way to price borrowed or lent money. The interest is calculated only on the original amount, never on interest already earned. It is used in many short-term loans, some bonds, bank notices and school exercises.
Enter the principal, the annual rate and the time in years, and the calculator returns the interest and the total amount you will owe or receive.
How to use it
- Enter the Principal Amount.
- Enter the Annual Interest Rate.
- Enter the Time Period in years. Use decimals for part years, for example 0.5 for six months.
- Press Calculate.
Simple interest formula
SI = P × R × T ÷ 100 and Amount = P + SI, where P is the principal, R the yearly rate in percent and T the time in years. Interest grows in a straight line, the same amount every year.
Worked example
₹1,00,000 at 8% for 3 years
| Interest | 100000 × 8 × 3 ÷ 100 = 24,000 |
| Total amount | 1,24,000 |
With yearly compounding the total would be ₹1,25,971. Simple interest is lower because interest never earns interest.
Tips and common mistakes
- Convert months to years: 9 months is 0.75.
- Check whether a lender's quoted rate is simple or compound. Compound costs more over time.
- Some personal loans quote a flat rate, which is simple interest on the original amount even as you repay. Its true cost is much higher.
- For savings, simple interest understates growth. Use the compound interest calculator.
- Add up the total amount to know your cash needs at the end.
Frequently asked questions
What is the simple interest formula?
SI = P × R × T / 100.
What is the difference between simple and compound interest?
Simple interest is only on the principal. Compound interest is on the principal plus accumulated interest.
How do I handle months or days?
Convert to years. 6 months is 0.5 and 90 days is about 0.25.
Where is simple interest used?
Short-term personal loans, some bonds and certain bank products.
Can I find the rate or time instead?
Rearrange: R = SI × 100 ÷ (P × T) and T = SI × 100 ÷ (P × R).
Is simple interest cheaper for the borrower?
Yes, over multiple years, compared with compound interest at the same rate.