Simple Interest Calculator
Interest on the original amount only, never on interest already earned. Enter the principal, the rate and how long for. Nothing is uploaded.
| Year | Interest | Balance |
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Every row adds the same interest, because simple interest is always charged on the principal and never on the interest already earned. That flat line is the whole difference from compounding.
How to use it
- Enter the principal — the amount borrowed or deposited.
- Enter the annual rate. A rate written as 8% per annum goes in as simply 8.
- Set the period, in years, months or days. The table on the right fills in as you type.
The formula
Simple interest is one of the few pieces of financial arithmetic you can do on paper: interest = principal × rate × time ÷ 100, with the rate per year and the time in years. Fifty thousand rupees at 8% for three years earns 12,000, so 62,000 comes back at the end.
Because the principal never changes, every year earns exactly the same amount. That is why the year-by-year table is a straight line rather than a curve.
Where simple interest is actually used
Most long-term products in India compound, so simple interest turns up in a narrower set of places than people expect: many gold loans and short-term personal loans, car loans quoted on a flat rate, some government schemes, and almost every school and competitive exam question. It is also the right sum for a private loan between two people, where nobody is tracking a compounding balance.
Watch out for the flat rate trap. A car loan advertised at a flat 8% is not the same as 8% reducing balance, because you keep paying interest on money you have already repaid. The effective rate is close to double. If you are comparing EMIs, use the EMI calculator rather than this page.
Months and days
Months are divided by 12 and days by 365 before the sum runs. Banks and lenders sometimes count a year as 360 or 366 days instead, so a figure worked out in days can sit a little either side of a statement. For anything that matters legally, check the convention written into the agreement.
Frequently asked questions
What is the simple interest formula?
Interest equals principal times rate times time, divided by one hundred. The rate is per year and the time is in years, so 50,000 at 8 percent for 3 years earns 12,000 of interest and 62,000 comes back in total.
How is simple interest different from compound interest?
Simple interest is always charged on the original principal, so every year earns exactly the same amount. Compound interest is charged on the balance, which already includes last year's interest, so each year earns a little more than the one before. Over short periods the gap is small; over ten years or more it is large.
Can I enter a period in months or days?
Yes. Pick months or days in the dropdown and the period is converted to years for you, dividing by 12 or by 365. Lenders sometimes count a year as 360 or 366 days, so a day-based figure can differ slightly from the one on a bank statement.
Is anything I type sent anywhere?
No. The arithmetic happens in JavaScript inside your own browser. Nothing is uploaded and nothing is saved - close the tab and it is gone.