Simple Interest Calculator
FinanceCalculate simple interest — no compounding — for any principal, rate, and time period.
Total Amount
Simple interest doesn't compound — for longer horizons, compare with compound interest or FD rates to see the difference.
Worked Example — ₹1,00,000 at 8% for 3 years
Frequently Asked Questions
SI = P × R × T ÷ 100, where P is the principal, R is the annual interest rate as a percentage, and T is the time period in years. The total amount is simply the principal plus this interest.
Common Mistakes to Avoid
- Home loans don't use simple interest — banks charge reducing-balance EMI instead. Simple interest is common for some short-term loans and flat-rate ('add-on interest') personal or vehicle loans, but home loans are almost always reducing-balance. For an accurate home loan estimate, use the EMI Calculator instead.
- Simple and compound interest only match for a single one-year period. Over multiple years, compound interest pulls ahead because each year earns interest on the previous year's interest too — simple interest grows by the exact same amount every year instead.
References
- RBI guidelines on interest computation methods for loans and deposits
Last reviewed July 2026
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