Simple Interest Calculator
Calculate simple interest instantly using the standard SI = PRT/100 formula. Useful for short-term loans, government bonds, and quick interest estimates.
How it works
Simple interest is proportional to the principal, rate, and time. It never compounds — interest is always calculated on the original principal, not on accumulated interest. This makes it easy to compute mentally and predictable for borrowers.
Formula
SI = P × R × T ÷ 100
Interest is always computed on the original principal — it does not grow on itself.
| Symbol | Variable | Unit | Description |
|---|---|---|---|
| P | Principal | ₹ | |
| R | Annual rate | % | |
| T | Time | years |
Worked example
₹10,000 at 10% for 2 years
- Principal:
- ₹10,000
- Rate:
- 10%
- Time:
- 2 years
SI = 10,000 × 10 × 2 ÷ 100 = ₹2,000. Total = ₹10,000 + ₹2,000 = ₹12,000.
Limitations
Simple interest is rarely used for mortgages or FDs — those use compound interest. For real loan costs, use the EMI or compound interest calculator.
Frequently asked questions
When is simple interest used in practice?
Mainly for short-term loans, car loans (in some cases), government Treasury Bills, and as a simplification for quick estimates. Most long-term financial products use compound interest.
Is SI always better for the borrower than CI?
Yes — you pay less total interest with simple interest because interest doesn't compound on itself. Over long periods, the difference can be substantial.
What if the time period is in months?
Convert months to years: 6 months = 0.5 years, 3 months = 0.25 years, etc. Divide months by 12.
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Last reviewed: 2026-08-22.