Simple Interest Calculator
Calculate simple interest and the total amount from principal, rate and time in years, months or days, with the formula shown.
Enter the principal, the yearly rate and the time.
More Finance & Loan Calculators
View all 20Most savings and loans use compound interest; simple interest is common for short loans, some bonds and textbook problems.
What Is Simple Interest?
Simple interest is interest calculated only on the original amount (the principal), never on interest already earned. It is used for some short-term loans, certain bonds and many maths problems. This calculator works it out for time in years, months or days, shows the working, and compares the result with compound interest.
How to Use It
- Enter the principal.
- Enter the yearly interest rate.
- Enter the time and choose years, months or days.
Example
Lending ₹25,000 at 9% a year for 18 months earns simple interest of ₹25,000 × 9 × 1.5 ÷ 100 = ₹3,375, so the total due is ₹28,375. With yearly compounding, the same loan would earn ₹3,449.84 - a small difference over 18 months, but a big one over 20 years.
The Formula
Simple interest = P × R × T ÷ 100, where P is the principal, R the yearly rate in percent and T the time in years. Months are divided by 12 and days by 365 to turn them into years.
Simple vs Compound Interest
With simple interest the interest is the same every year; with compound interest it grows every year. Savings accounts, fixed deposits and loans in most countries use compound interest, so use the Compound Interest Calculator for those.
Limitations
Some lenders count days with a 360-day year, which gives slightly higher interest. Fees and taxes are not included. For a loan repaid in equal monthly instalments, use the EMI Calculator.
Frequently Asked Questions
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