Simple Interest Calculator
Formula: Simple Interest = (Principal × Rate × Time) / 100. Used for short-term loans, some FDs and promissory notes.
Details
₹1,00,000
8.00%
5 yrs
Principal
₹1,00,000
Interest
₹40,000
Total Amount
₹1,40,000
SI = ₹1,00,000 × 8% × 5 yrs = ₹40,000
Frequently asked questions
What is simple interest?
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Simple interest is calculated only on the original principal, not on accumulated interest. Formula: SI = P × R × T / 100. Used for short-term loans, some FDs and bonds that pay interest out rather than compound.
Simple vs compound interest — which is better?
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For borrowers, simple interest is cheaper because interest does not get charged on interest. For depositors, compound interest grows faster. Banks typically offer compound interest on deposits and charge compound on loans.
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