Simple Interest Calculator
Last Updated: 8 April 2026
Simple Interest Calculator
Calculate interest on loans instantly with the SI formula
What is Simple Interest Calculator?
Simple Interest (SI) is the easiest method of calculating interest on a loan or investment. Unlike Compound Interest, where interest earns interest, SI assumes interest is paid only on the original principal amount. This formula is standard for short-term personal loans.
📊 Practical Example
"If you lend ₹10,000 to a friend at 10% annual interest for 3 years: Year 1 Interest = ₹1,000. Year 2 Interest = ₹1,000. Year 3 Interest = ₹1,000. Total Interest = ₹3,000. Total Repayment = ₹13,000."
⚠️ Common Mistake
Confusing SI with CI. Most banks use Compound Interest (CI) for savings and loans. Using this SI calculator for a Bank FD or Home Loan will give incorrect (lower) results because it ignores the 'interest on interest' effect.
How it Works & Benefits
Standard Formula
Uses the universal SI = (P × R × T) / 100 logic.
Quick Estimates
Best for short-term personal loans or friendly lending.
Total Payable
Shows both the interest component and final maturity amount.
Frequently Asked Questions
Common queries answered for you
Simple Interest (SI) is a quick method of calculating the interest charge on a loan. It is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.
In Simple Interest, you earn interest ONLY on the principal amount. In Compound Interest, you earn interest on the Principal + Accumulated Interest. CI yields much higher returns over time.
SI = (P × R × T) / 100. Where P = Principal, R = Rate of Interest per year, and T = Time in years.
Rarely for savings. Banks mostly use Compound Interest for Savings/FDs. However, some short-term personal loans or informal sector loans still use Simple Interest logic.
Additional Information
Real-world Example
If you borrow ₹10,000 from a friend at 10% yearly interest for 2 years:
Interest = (10,000 × 10 × 2) / 100 = ₹2,000.
Total amount to repay = ₹10,000 + ₹2,000 = ₹12,000.