Simple Interest Calculator
Calculate simple interest for loans or investments by year, month, or day. Instantly view interest earned and total maturity amount.
How to calculate simple interest
Enter the principal, the yearly rate and the time, and see the interest and total.
- 01
Enter the principal and the yearly rate
The calculator starts with ₹1,00,000 at 8%. The rate is always per year, from 0 to 100%.
- 02
Enter the time in years, months or days
Pick the unit from the dropdown. Months are divided by 12 and days by 365, so 91 days counts as 0.249 of a year.
- 03
Read the interest, the total and the breakdown
You get the interest, the principal plus interest, and a period-by-period breakdown showing the same interest added each year.
Worked examples with I = P × R × T
Simple interest is the principal × the yearly rate × the time in years. For ₹1,00,000 at 8% for 5 years: 1,00,000 × 0.08 × 5 = ₹40,000 of interest, so you get back ₹1,40,000. The interest is the same ₹8,000 every year because it's always worked out on the original ₹1,00,000.
For short periods, convert the time to years. A ₹1,00,000 deposit for 91 days at 7% earns 1,00,000 × 0.07 × 91 ÷ 365 = ₹1,745.21. A ₹50,000 gold loan for 6 months at 12% costs 50,000 × 0.12 × 0.5 = ₹3,000 in interest.
Simple versus compound over time
Over a year there's no difference. After that, compound interest pulls ahead because interest starts earning interest. Here's ₹1,00,000 at 8%, with compound interest added yearly:
| Years | Simple interest | Compound interest | Gap |
|---|---|---|---|
| 1 | ₹8,000 | ₹8,000 | ₹0 |
| 3 | ₹24,000 | ₹25,971 | ₹1,971 |
| 5 | ₹40,000 | ₹46,933 | ₹6,933 |
| 10 | ₹80,000 | ₹1,15,892 | ₹35,892 |
| 20 | ₹1,60,000 | ₹3,66,096 | ₹2,06,096 |
So simple interest is a fair description of short-term borrowing and some fixed-term products, but it understates what long-term savings earn. If you're lending money, compound terms favour you; if you're borrowing, simple terms do.
Watch out for flat-rate loans
Some personal and vehicle loans quote a flat rate, which is simple interest on the full amount for the whole term, even though you repay part of it every month. A ₹1,00,000 loan at a 10% flat rate for 3 years costs ₹30,000 in interest, with an EMI of about ₹3,611.
The same loan at 10% on a reducing balance, which is how most bank loans work, costs only about ₹16,162 with an EMI of ₹3,227. The flat 10% is really closer to 17.9% a year once you allow for the shrinking balance. Always ask for the reducing-balance rate, or the APR, before signing.
What the calculator doesn't cover
- It doesn't compound. For savings that add interest to the balance, use the Compound Interest calculator.
- It doesn't model repayments. For a loan repaid monthly, the EMI calculator shows the real interest cost.
- Day counts use a 365-day year. Some banks use 360 days for certain products, which slightly raises the interest.
- Tax and fees aren't included.