// Free Online Tool
Calculate simple interest on any principal. Enter principal, annual rate and time period to get total interest and final amount instantly.
// Overview
Simple Interest (SI) is calculated only on the original principal, never on previously earned interest. Formula: SI = (P x R x T) / 100. It is used in short-term personal loans, chit funds, and informal lending.
Unlike compound interest where returns compound over time, simple interest grows linearly. For the same rate, SI will always be less than CI over periods longer than one compounding period. This makes SI better when borrowing (you pay less interest) and CI better when investing (you earn more).
Common Indian uses: calculating interest on informal personal loans between family or friends, estimating returns on post office savings certificates, and academic problems in school and competitive exam preparation.
// Formula
SI = (P x R x T) / 100
Total Amount = P + SI
Example: Rs 50,000 at 8% p.a. for 3 years: SI = (50,000 x 8 x 3)/100 = Rs 12,000. Total = Rs 62,000.
For periods less than 1 year, convert to fractions: 6 months = 0.5 years.
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