ToolFoxSimple Interest Calculator
Calculate simple interest and the total repayable amount on a principal, rate and time period.
- Total amount
- ₹12,100
- Interest earned
- ₹2,100
How it works
Simple interest grows linearly instead of compounding: Interest = Principal × Rate × Time ÷ 100, where the rate is per year and time is in years. Unlike compound interest, earlier interest never itself earns further interest, so the total interest for a given rate and duration is always lower than the compound-interest equivalent.
Example
A ₹10,000 principal at 7% per year for 3 years earns ₹10,000 × 7 × 3 ÷ 100 = ₹2,100 in interest, for a total repayable amount of ₹12,100 — noticeably less than the same numbers compounded annually would produce.
Frequently asked questions
How is simple interest different from compound interest?
Simple interest is calculated only on the original principal every period. Compound interest is calculated on the principal plus any interest already added, so it grows faster.
Where is simple interest actually used?
Some short-term loans, certain bonds, and basic savings instruments in India use simple interest; check your loan or deposit documents to see which method applies.
Can the rate or time be zero?
A zero rate or zero time both mean no interest accrues — the calculator requires a positive rate and duration to produce a result.
Is the formula the same worldwide?
Yes — simple interest is a universal formula; only the currency symbol shown here (₹) is India-specific.
Related tools
Calculate how a lump sum grows with compound interest at yearly, half-yearly, quarterly or monthly compounding.
FD CalculatorCalculate fixed deposit maturity value and interest with quarterly compounding, as Indian banks do.
EMI CalculatorCalculate your monthly EMI, total interest and total payment for home, car or personal loans.