Simple Interest Calculator

Calculate simple interest, total amount, principal, rate, or time — enter any three values and get the fourth instantly. Includes a year-by-year breakdown table.

Simple Interest

₹1,500

on ₹10,000 principal

Principal (P) ₹10,000

Annual Rate (R) 5%

Time (T) 3 years

Simple Interest (SI) ₹1,500

Total Amount (A) ₹11,500

Formula Used

SI = P × R × T / 100

Year-by-Year Breakdown

Year	Interest Earned	Total Interest	Total Amount

What is Simple Interest?

Simple Interest (SI) is calculated only on the original principal — it never compounds. It is the most straightforward form of interest and is used in short-term loans, car loans, consumer credit, and savings bonds.

Simple Interest Formula

SI = (P × R × T) / 100

Where P = Principal, R = Annual rate (%), T = Time in years. Total amount = A = P + SI.

All Rearranged Formulas

Find	Formula
Interest (SI)	SI = P × R × T / 100
Principal (P)	P = SI × 100 / (R × T)
Rate (R)	R = SI × 100 / (P × T)
Time (T)	T = SI × 100 / (P × R)
Total Amount	A = P + SI

Simple vs Compound Interest

Feature	Simple	Compound
Calculated on	Principal only	Principal + interest
Growth	Linear	Exponential
Best for	Short-term loans	Long-term savings

Where Simple Interest is Used

Car loans — most auto loans use SI on the outstanding balance
Short-term personal loans — loans under 1 year
Treasury bills — government short-term securities
Store credit and BNPL — buy-now-pay-later schemes
Savings bonds — fixed-return bonds paying SI annually

Simple Interest Formula and Worked Example

Simple interest is calculated using SI = (P × R × T) / 100, where P is the principal amount, R is the annual interest rate as a percentage, and T is the time period in years. Unlike compound interest, simple interest is always calculated on the original principal only — it never earns interest on previously accumulated interest.

For example, on a principal of ₹50,000 at 8% annual interest for 3 years: SI = (50,000 × 8 × 3) / 100 = ₹12,000, giving a total repayment or maturity amount of ₹62,000. Compare this to the same inputs under compound interest, which would yield a higher total because each year's interest compounds on the growing balance rather than staying fixed to the original principal.

Linear Growth: Simple interest grows by the same fixed amount every period, unlike compound interest's accelerating growth.
Common Uses: Short-term loans, certain fixed-term deposits, and some educational examples use simple interest for clarity.
Compare With Compound Interest: Use the Compound Interest Calculator to see how the same inputs perform with compounding.

Frequently Asked Questions

Everything you need to know about simple interest

SI = (P × R × T) / 100. For example, ₹10,000 at 5% for 3 years: SI = (10000 × 5 × 3) / 100 = ₹1,500. Total amount = ₹11,500.

Simple interest is calculated only on the original principal and grows linearly. Compound interest is calculated on the principal plus accumulated interest, growing exponentially. Over long periods, compound interest produces significantly more than simple interest at the same rate.

Convert months to years by dividing by 12. For 6 months: T = 0.5. For 18 months: T = 1.5. Then use SI = P × R × T / 100 as normal.

Use P = (SI × 100) / (R × T). Example: SI = ₹1,500, R = 5%, T = 3 years → P = (1500 × 100) / (5 × 3) = ₹10,000. Click the "Principal" tab in the calculator above to solve this instantly.

No. Each year earns the exact same interest — P × R / 100. The base (principal) never changes, so neither does the annual interest. This makes it very predictable and easy to budget for.