Simple Interest Calculator
Calculate simple interest and the total amount payable or receivable on a principal amount over a given time period at a fixed annual interest rate.
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Your result
₹24,000
Simple interest
AI explanation
Formula
SI = P × R × T / 100Worked example
₹1,00,000 at 8% for 3 years
| Field | Value |
|---|---|
| Principal amount | 100000 |
| Interest rate (per annum) | 8 |
| Time period (years) | 3 |
| Simple interest | 24000 |
| Total amount (principal + interest) | 124000 |
Assumptions
- Interest is calculated only on the original principal — it does not compound.
- Assumes a fixed annual interest rate for the entire time period.
Frequently asked questions
How is simple interest different from compound interest?
Simple interest is calculated only on the original principal for the full period. Compound interest is calculated on the principal plus any interest already accrued, so it grows faster over time. Use the Compound Interest Calculator to compare.
What kinds of loans or deposits use simple interest?
Some short-term loans, certain fixed-tenure deposits, and instruments like simple-interest bonds use this method. Most bank loans and deposits in India instead use compound (or reducing-balance) interest.
Can I use months instead of years for the time period?
Yes — convert months to years by dividing by 12 (e.g., 18 months = 1.5 years) before entering the time period.
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Sources
- Reserve Bank of India — Financial Education — Reserve Bank of India. Effective 01-05-2015, reviewed 12-09-2026.
This calculator provides a mathematical estimate using the standard simple interest formula and is for general educational use. It does not represent an offer from any bank or financial institution.
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