Simple Interest Calculator
Calculate simple interest on a loan or deposit. Enter principal, annual rate and time to find the interest payable and total amount.
Formula last reviewed 4 August 2026 · How we verify our calculators
Total amount
- Principal
- ₹50,000
- Total interest
- ₹12,000
Updates live as you type
Frequently asked questions
Simple interest is calculated only on the original principal for the entire period. It does not earn interest on previously accrued interest, so it grows in a straight line.
SI = (P × R × T) ÷ 100, where P is principal, R is the annual rate and T is the time in years. The total amount is principal plus interest.
It is common on short-term loans, some car and personal loans, and certain fixed deposits or bonds that pay out interest periodically rather than reinvesting it.
For a borrower, simple interest is cheaper because interest never compounds. For a saver, compound interest grows your money faster.
Every year, the exact same interest — that's the entire idea
Put ₹50,000 at 8% for 3 years into this calculator and it returns ₹12,000 in interest, flat — not a rupee more or less than if you'd multiplied 50,000 × 8 × 3 ÷ 100 on a scrap of paper yourself. That's simple interest: SI = (P × R × T) ÷ 100, applied once to the original principal, with no mechanism for interest to ever earn interest of its own. The total amount at the end is ₹62,000, and every one of the three years contributed an identical ₹4,000, because the base it's calculated on never changes.
Why the line is straight, not curved
Compare this to a compounding instrument and the difference is entirely in what counts as the "base" each year. Here, year two's interest is calculated on the same ₹50,000 as year one — the ₹4,000 already earned just sits alongside it, doing nothing further. That's what keeps the growth perfectly linear instead of accelerating, and it's also exactly why this formula is trivial to verify by hand: no iteration, no exponent, just three numbers multiplied and divided by 100.
Where you'll actually run into it
Simple interest shows up on short-term loans, some car and personal loan structures, and certain deposits or bonds that pay interest out periodically rather than folding it back into the balance. If you're the borrower, that's good news — you pay less over the loan's life than an equivalent compounding structure would charge, since nothing you owe ever generates interest of its own. If you're the saver, it's the opposite: your money grows more slowly than it would sitting in an account that reinvests interest instead of paying it out. A useful check: run the same principal, rate and tenure through the compound interest calculator and look at the gap — that gap is, in rupees, exactly what compounding is worth over your specific time horizon.