Enter principal, rate and time to get simple interest and the final amount instantly.
How to use the Simple Interest Calculator
- Enter the Principal — the amount you are lending or depositing.
- Enter the Annual Interest Rate — for example 7.
- Enter the Time Period in years — decimals like 2.5 work too.
- Press Calculate Interest — interest, total amount and per-month interest appear.
The simple interest formula
Simple interest is calculated as SI = P × R × T ÷ 100, where P is the principal, R is the annual rate and T is the time in years. The interest is charged on the original principal only — it never compounds.
Worked example: ₹50,000 at 7% for 5 years → SI = 50,000 × 7 × 5 ÷ 100 = ₹17,500. You get back ₹67,500 in total, which is about ₹292 of interest per month.
The same money at compound interest would grow to ₹70,128 — that gap is why banks love quoting simple interest on some products and compound on others.
Where simple interest actually applies
Gold loans and short-term personal loans commonly use simple interest.
Some fixed deposits and small-savings schemes quote simple interest, especially for short tenures.
Car loans advertised as “flat rate” charge simple interest on the full principal for the entire tenure — a 10% flat rate costs roughly as much as an 18–19% reducing-balance rate. Always ask which method a loan uses before comparing.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal; compound interest is charged on principal plus accumulated interest. Over long periods, compounding grows much faster.
How do I calculate simple interest manually?
SI = Principal × Rate × Time ÷ 100. Example: ₹20,000 at 6% for 3 years = 20,000 × 6 × 3 ÷ 100 = ₹3,600.
Why does my bank FD show more than this calculator?
Bank fixed deposits compound quarterly — interest is added to the principal every three months. Use this calculator for simple-interest products, or an EMI/compound tool for those.
What is a flat-rate loan?
A flat-rate loan charges interest on the original principal for the whole tenure even as you repay. The true effective cost is roughly 1.8–1.9× the flat rate, so convert before comparing.
Is this calculator free?
Yes — free, unlimited, and your numbers never leave your browser.