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Simple Interest Calculator
Principal × Rate × Time — solved instantly

Calculate simple interest on any principal amount. See interest earned, total maturity amount, and compare with compound interest returns. Essential for students and investors.

SI formulaInstant resultsCompare with CIStudent friendly
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?What is simple interest?

Simple Interest (SI) is a method of calculating interest where the interest is computed only on the original principal amount throughout the loan or investment period. Unlike compound interest where interest earns interest, simple interest remains constant each year. According to the National Council of Educational Research and Training (NCERT), simple interest is introduced in Class 7 mathematics and forms the foundation for understanding all financial calculations.

Simple interest is commonly used in short-term loans, certain government bonds, and educational contexts. The Reserve Bank of India specifies that certain government savings instruments like the Kisan Vikas Patra use simple interest calculation methodology, while most bank FDs and loans use compound interest.

Simple interest formula

SI = P × R × T ÷ 100, where P = Principal, R = Annual rate (%), T = Time in years. For ₹1,00,000 at 7% for 3 years: SI = 1,00,000 × 7 × 3 ÷ 100 = ₹21,000. Total amount = ₹1,21,000. With compound interest (quarterly), the same investment yields ₹23,144 — a difference of ₹2,144.

vsSimple interest vs compound interest

FeatureSimple interestCompound interest
Interest onPrincipal onlyPrincipal + accumulated interest
Growth patternLinearExponential
₹1L at 7%, 3 yrs₹21,000 interest₹23,144 interest (quarterly)
₹1L at 7%, 10 yrs₹70,000 interest₹1,00,675 interest (quarterly)
Common useShort-term loans, educationBank FDs, loans, investments

Calculate compound interest

See how much more you earn with compound interest on FDs and investments.

FD Calculator (compound interest) →

Frequently asked questions

What is the formula for simple interest?
SI = P × R × T ÷ 100, where P = Principal amount, R = Annual interest rate (%), T = Time in years. Total Amount = P + SI. This formula is taught in NCERT Class 7 mathematics and is the basis for all financial calculations.
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal. Compound interest is calculated on principal plus accumulated interest. Over long periods, compound interest grows exponentially — ₹1 lakh at 7% for 10 years earns ₹70,000 (SI) vs ₹1,00,675 (CI quarterly).
Where is simple interest used?
Simple interest is used in short-term personal loans, certain government savings bonds like Kisan Vikas Patra, auto loans in some cases, and educational calculations. Most bank deposits and home/car loans use compound interest.
How to calculate total amount with simple interest?
Total Amount = Principal + Simple Interest = P + (P × R × T ÷ 100) = P × (1 + R × T ÷ 100). Example: ₹50,000 at 8% for 2 years = ₹50,000 × (1 + 8 × 2 ÷ 100) = ₹58,000.