Simple Interest Calculator
Interest on principal only. Calculate simple interest and the total repayable amount for any principal, rate and period.
About the Simple Interest Calculator
Simple interest is charged only on the original principal, never on interest already accrued. It is the basis for most short-term lending, many vehicle and gold loans, and deposits held for under six months. Because nothing compounds, the interest amount is identical in every period of the term.
Simple interest formula
SI = (P x R x T) / 100 and Total = P + SI
- SI
- Simple interest
- P
- Principal
- R
- Annual rate of interest (in percent)
- T
- Time in years
Because interest never joins the principal, the amount earned in year one is identical to the amount earned in year ten.
Using this calculator
- Enter the principal amount.
- Set the annual interest rate.
- Choose the time period in years.
- Read the interest and the total payable or receivable.
Simple Interest Calculator FAQs
What is the simple interest formula?
SI = (P x R x T) / 100, where P is principal, R is the annual rate in percent and T is time in years. The total amount payable is principal plus that interest, with no compounding at any stage.
Where is simple interest actually used?
Short-term personal and vehicle loans, gold loans, many instalment purchases and deposits held under six months typically use simple interest. Most long-term savings products compound instead, because compounding favours the depositor.
Is simple interest better for a borrower?
Yes, at the same nominal rate. Since interest never accrues on unpaid interest, the total cost is lower than a compounding loan of identical rate and tenure. The gap widens as the term lengthens.
How do I calculate simple interest for months?
Convert the period into years before applying the formula - nine months becomes 0.75 years, eighteen months becomes 1.5. Alternatively divide the annual rate by twelve and multiply by the number of months.
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Important: this calculator provides general information and arithmetic only. It is not personal financial, tax or investment advice. Projected returns are illustrations based on the rate you enter, not guarantees, and market-linked investments can fall in value. Verify current tax rates and scheme terms before acting, and consult a qualified adviser where the decision matters.