Simple Interest Calculator
Quickly calculate Simple Interest (SI) without the complexities of compounding. Ideal for short-term loans and basic savings.
One Lakh Rupees
Five Percent
Ten years
Total Amount
₹1,50,000
Total Interest Earned
₹50,000
Financial Projection
Optional: want an expert to review your numbers? Leave your email and we'll reach out. Downloads above are free — no email needed.
Annual Breakdown
Simple Interest Deep Dive
What is simple interest
Simple interest is calculated on the original principal. Previously calculated interest does not become part of that principal for the next calculation.
This calculator estimates interest and the total amount for a fixed principal, annual rate and duration. At an unchanged rate, the same amount of interest is added for each equal period.
A worked example
For ₹2,00,000 at 10% annual simple interest for five years:
Interest = ₹2,00,000 × 10 × 5 ÷ 100 = ₹1,00,000
Total amount = ₹2,00,000 + ₹1,00,000 = ₹3,00,000
The calculation assumes the principal stays outstanding for the whole period. Repayments during the term need a schedule that adjusts the balance.
How to Use the Simple Interest Calculator
Enter the original principal.
Enter the annual percentage rate, such as 10 for 10%.
Enter the duration in years. For a partial year, convert the period to years within the input precision available.
Review total interest and the principal-plus-interest amount.
Compare another rate or duration while holding the other inputs constant.
How Simple Interest Is Calculated
The simple interest formula
P is principal, R is the annual percentage rate and T is time in years. If the rate is written as a decimal, use SI = P × r × T instead. For example, 8% is 8 in the percentage formula and 0.08 in the decimal formula.
Calculating interest for months
₹1,00,000 at 12% a year for six months produces ₹6,000 of simple interest. Six months is 0.5 years, not six years.
Calculating interest for days
With a 365-day convention, SI = P × R × days ÷ 36500. For ₹1,00,000 at 12% for 30 days, that gives ₹986.30. Using a 360-day convention gives ₹1,000 instead.
The correct convention comes from the agreement. The daily formula is an explanation of the arithmetic, not a claim that this page includes a separate day-count selector.
Comparing Interest Methods
Simple interest and compound interest
For ₹1,000 at 10% a year for three years, simple interest produces a final amount of ₹1,300. Annual compound interest produces ₹1,331 because earlier interest is added to the growing balance.
Use the Compound Interest Calculator to compare compounding frequencies. SEBI's compounding illustration provides another educational reference for growth on accumulated balances. [1]
Simple interest and a reducing balance loan
This page keeps the original principal unchanged. An amortising loan charges interest on the outstanding principal as repayments reduce it. Applying simple interest to the original loan amount for the full tenure does not reproduce a reducing-balance EMI schedule.
Use the Loan Calculator for EMI, interest and repayment breakdowns. Check the lender's method, payment dates and charges before comparing a result with a loan statement.
Flat rates and the cost of borrowing
A flat or add-on rate may be applied to the original amount even while instalments are repaid. Its quoted percentage is not directly comparable with the same reducing-balance percentage.
For borrowing comparisons, look at the full repayment schedule and annual percentage rate, which includes relevant borrowing costs. RBI's Key Facts Statement framework explains APR and loan disclosures. [2]
Common mistakes
Keep the rate and time units consistent. Check whether interest compounds, whether repayments change the principal and whether the agreement adds fees or penalties. The basic simple-interest formula does not include those adjustments.
The APY Calculator helps explain effective annual yields when compounding applies.
Frequently Asked Questions
Is simple interest calculated on accumulated interest?
Can simple interest be calculated for less than a year?
Does this result include fees and tax?
Can this calculator calculate my loan EMI?
Why does my lender show a different interest amount?
Assumptions and Disclaimer
The calculation assumes a constant principal, fixed rate and no interest-on-interest. It is an educational estimate, not a lender quotation, tax calculation or financial recommendation. Actual terms determine the amount earned or charged.
Sources and Review
- SEBI Investor power of compounding calculator
- RBI Key Facts Statement for Loans and Advances dated 15 April 2024
Content reviewed on 26 October 2026.