Simple Interest Calculator
Calculate simple interest and total repayment from principal, rate and time.
Principal Amount
Annual Interest Rate
Time Period
Total Amount
₹1,40,000
Total Amount
₹1,40,000
Principal
₹1,00,000
Simple Interest
₹40,000
How this calculator works
Simple interest is calculated only on the original principal for the entire term: Interest = P × R × T / 100, where P is the principal, R is the annual rate, and T is the time in years. Unlike compound interest, it never earns interest on interest already accumulated, so it grows in a straight line rather than accelerating over time.
Simple interest is common for short-term loans and some fixed-term instruments — if you're comparing it against a compounding investment like an FD or RD, expect compound interest to pull ahead the longer the term runs.
Frequently Asked Questions
What's the formula for simple interest?
Interest = P × R × T / 100, where P is the principal, R is the annual interest rate, and T is the time in years. Total repayment is the principal plus this interest.
When is simple interest used instead of compound interest?
Simple interest is common for short-term loans, certain car loans, and some fixed-term instruments where interest doesn't compound. Most savings products (FDs, RDs, PPF) use compound interest instead, which grows faster over the same term.
Does simple interest grow linearly?
Yes — since interest is only ever calculated on the original principal, the total grows in a straight line over time, unlike compound interest which accelerates as interest starts earning its own interest.
This tool provides general estimates for informational purposes only and isn't financial or tax advice. Consult a qualified financial advisor or tax professional before making financial decisions.