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Simple Interest Calculator
Calculate simple interest on your investments and loans with detailed breakdown
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Simple Interest Formula
SI = (P × R × T) / 100
Where:
- • P = Principal (₹1,00,000)
- • R = Rate (8.5% per annum)
- • T = Time (3 years)
Simple Interest
₹25,500
Interest earned
Total Amount
₹1,25,500
Principal + Interest
Monthly Interest
₹708
Per month
Interest Breakdown
Principal Amount ₹1,00,000
Interest Rate 8.5% per annum
Time Period 3 years
Total Interest ₹25,500
Daily Interest ₹23
Monthly Interest ₹708
Yearly Interest ₹8,500
Maturity Amount ₹1,25,500
Simple vs Compound Interest
Simple Interest
Interest Earned: ₹25,500
Total Amount: ₹1,25,500
Compound Interest
Interest Earned: ₹27,729
Total Amount: ₹1,27,729
Difference: Compound interest earns ₹2,229 more than simple interest over this period.
Year-by-Year Breakdown
| Year | Annual Interest | Cumulative Interest | Total Amount |
|---|---|---|---|
| 1 | ₹8,500 | ₹8,500 | ₹1,08,500 |
| 2 | ₹8,500 | ₹17,000 | ₹1,17,000 |
| 3 | ₹8,500 | ₹25,500 | ₹1,25,500 |
Understanding Simple Interest
What is Simple Interest?
- • Interest calculated only on the principal amount
- • Does not compound - stays constant over time
- • Formula: SI = (P × R × T) / 100
- • Commonly used in personal loans
- • Easy to calculate and understand
Simple vs Compound Interest
- • Simple: Interest on principal only
- • Compound: Interest on principal + previous interest
- • Simple interest grows linearly
- • Compound interest grows exponentially
- • Longer periods favor compound interest
When is Simple Interest Used?
- • Short-term loans and advances
- • Personal loans and car loans
- • Some government savings schemes
- • Promissory notes and bills
- • Quick calculation scenarios
Key Benefits
- • Predictable and consistent returns
- • Easy calculation and planning
- • Lower risk for borrowers
- • Transparent interest structure
- • Good for short-term investments