Simple Interest Calculator – Calculate SI and Total Amount Instantly
Use this free simple interest calculator to find the interest earned or paid on a principal amount at a fixed rate over a specific time period. Instant results, no signup required.
Simple Interest Formula
SI = (P × R × T) ÷ 100 | Total Amount = P + SI
Where P = Principal, R = Annual Rate (%), T = Time (Years)
Simple vs Compound Interest
| Feature | Simple Interest | Compound Interest |
|---|
| Calculated on | Principal only | Principal + accumulated interest |
| Growth | Linear | Exponential |
| Used in | Short-term loans, some FDs | Most savings, mutual funds |
Examples
| Principal | Rate | Time | SI | Total |
|---|
| ₹10,000 | 8% | 2 yrs | ₹1,600 | ₹11,600 |
| ₹50,000 | 10% | 3 yrs | ₹15,000 | ₹65,000 |
| ₹1,00,000 | 7.5% | 5 yrs | ₹37,500 | ₹1,37,500 |
💡 Simple interest is commonly used in vehicle loans, personal loans under 1 year and government bonds. For longer durations, most banks switch to compound interest which increases the cost of borrowing.
Frequently Asked Questions
What is simple interest?Simple interest is calculated only on the original principal amount, not on accumulated interest. Formula: SI = (P × R × T) / 100.
When is simple interest used in India?Simple interest is used in certain car loans, gold loans, short-term personal loans and government savings schemes like NSC (National Savings Certificate).
Is simple interest better for borrowers?Yes. Since interest is charged only on the original principal, total interest paid under simple interest is always less than compound interest for the same rate and duration.