Calculate simple interest earnings instantly with our free online calculator. Perfect for loans, deposits, and investment planning with detailed breakdowns.
Simple interest is a method of calculating interest charges based only on the principal amount. Unlike compound interest, simple interest does not include interest earned on previously accumulated interest. This makes it straightforward to calculate and understand, which is why it's commonly used in various financial products.
The simple interest formula is: SI = (P × R × T) / 100, where:
The total amount after adding simple interest is calculated as: A = P + SI. This straightforward calculation makes simple interest ideal for short-term loans, certain types of bonds, and situations where interest is paid out regularly.
For ₹10,000 at 10% annual interest for 5 years:
Interest: ₹5,000
Total: ₹15,000
Interest: ₹6,105
Total: ₹16,105
For periods less than 2-3 years
When interest is paid regularly
When easy calculation is preferred
SI = (P × R × T) / 100This is the most common method where you multiply principal, rate, and time, then divide by 100.
Principal = ₹50,000, Rate = 8%, Time = 3 years
SI = (50,000 × 8 × 3) / 100 = ₹12,000
P = (SI × 100) / (R × T)R = (SI × 100) / (P × T)T = (SI × 100) / (P × R)SI = (P × R × T) / (100 × 12)SI = (P × R × T) / (100 × 365)SI = (P × R × T) / (100 × 4)Simple interest is calculated using the formula: SI = (P × R × T) / 100, where P is principal, R is rate per annum, and T is time in years. Unlike compound interest, simple interest is calculated only on the principal amount, making it straightforward and predictable.
Simple interest is calculated only on the principal amount, while compound interest is calculated on both principal and accumulated interest. Compound interest grows faster over time, making it more beneficial for long-term investments, while simple interest is often used for short-term loans and deposits.
Simple interest is commonly used in personal loans, car loans, short-term deposits, and some government bonds. It's also used in situations where interest is paid out regularly rather than reinvested, such as certain fixed deposits and money market accounts.
To find principal when you know the simple interest: P = (SI × 100) / (R × T). You can also use our calculator's reverse calculation feature to determine the principal amount needed to earn a specific interest amount at a given rate and time period.
Yes, you can calculate simple interest for monthly, quarterly, or daily periods by adjusting the formula. For monthly: divide by 12, for daily: divide by 365, for quarterly: divide by 4. Our calculator automatically handles different time period conversions for accurate results.
It depends on your perspective and time frame. For borrowers, simple interest is generally better as it results in lower total interest payments. For investors, compound interest is usually better for long-term growth, while simple interest might be preferred for short-term investments or when regular income is needed.
Our calculator uses precise mathematical formulas and provides accurate results for simple interest calculations. However, actual loan or investment terms may include additional fees, taxes, or compounding factors that aren't reflected in basic simple interest calculations. Always verify with your financial institution for exact terms.
You need three basic pieces of information: the principal amount (initial sum), the annual interest rate (as a percentage), and the time period (in years, months, or days). Our calculator can work with any of these time units and also perform reverse calculations if you know the desired interest amount.