Simple Interest Calculator
Simple interest is charged only on the original principal for the whole period, unlike compound interest where earlier interest itself starts earning interest. It's the basis for some loans and short-term deposits.
SI = (P × R × T) / 100, where P is the principal, R is the annual rate (%), and T is the time in years.
How to use this calculator
Enter the principal, the annual simple interest rate, and the time period in years. The calculator shows the interest and the total amount repayable.
What this doesn't account for
This assumes interest is charged only on the original principal for the entire period; if your product actually compounds (most bank deposits and loans do), use the compound interest calculator instead.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is charged only on the original principal for the whole period. Compound interest is charged on the principal plus any interest already added, so it grows faster over time.
Where is simple interest actually used?
Some short-term loans, certain bonds, and specific penalty or overdue-payment calculations use simple interest. Most savings products (FDs, RDs, savings accounts) compound instead.
Does a longer time period always mean more interest?
Yes, simple interest grows linearly with time: doubling the period exactly doubles the interest, unlike compound interest which accelerates.
Can I use this for a loan?
Only if your specific loan is genuinely a simple-interest loan. Most consumer loans in India (home, personal, vehicle) use reducing-balance EMI instead; use the EMI calculator for those.
This is a generic financial calculation, not investment, loan or tax advice specific to you. BrokerLens is not a SEBI-registered investment adviser.