Simple Interest Calculator
Calculate simple interest on your principal amount
Investment Details
How Simple Interest is Calculated?
Simple interest is calculated only on the principal amount, unlike compound interest which calculates on both principal and accumulated interest. It's commonly used for short-term loans, personal loans, and some savings accounts.
Simple Interest Formula/Equation
I = P × r × t
Total Amount = P(1 + rt)
Where:
- I = Interest earned
- P = Principal amount
- r = Annual interest rate (as decimal)
- t = Time in years
Example:
Let's say you borrow ₹1,00,000 at an annual interest rate of 10% for 3 years.
Given: P = ₹1,00,000, r = 10% = 0.10, t = 3 years
Step 1: Calculate Interest (I)
I = P × r × t
I = ₹1,00,000 × 0.10 × 3
I = ₹30,000
Step 2: Calculate Total Amount
Total Amount = P(1 + rt)
Total Amount = ₹1,00,000 × (1 + 0.10 × 3)
Total Amount = ₹1,00,000 × 1.30
Total Amount = ₹1,30,000
Result: You will pay ₹30,000 in interest, making the total repayment ₹1,30,000.
When is Simple Interest Used?
- Short-term personal loans
- Car loans and auto financing
- Some savings accounts and certificates of deposit
- Student loans (in some countries)
- Quick calculations for loan comparisons
Simple Interest vs Compound Interest
Simple Interest
- ✓ Calculated only on principal
- ✓ Linear growth over time
- ✓ Easier to calculate
- ✓ Common in short-term loans
- ✓ Lower total interest paid
Compound Interest
- ✓ Calculated on principal + interest
- ✓ Exponential growth over time
- ✓ More complex calculation
- ✓ Common in long-term investments
- ✓ Higher returns on investments
What Can You Calculate?
Auto Loans
Calculate interest on car loans and vehicle financing
Personal Loans
Estimate interest on short-term personal loans
Savings Accounts
Calculate interest on simple interest savings accounts
Global Loans
Works for loans in any country worldwide
Why Use Our Simple Interest Calculator?
Instant accurate calculations
Works for any currency
Yearly breakdown visualization
100% free, no registration
Mobile-friendly design
Compare loan options easily
Simple Interest Calculator FAQs
❓What is simple interest?
Simple interest is interest calculated only on the principal amount, not on previously earned interest. It's calculated as: Interest = Principal × Rate × Time.
❓When is simple interest used?
Simple interest is commonly used for short-term loans, car loans, personal loans, and some savings accounts. It's simpler to calculate and understand than compound interest.
❓What's the difference between simple and compound interest?
Simple interest is calculated only on the principal, while compound interest is calculated on principal plus previously earned interest. Compound interest grows faster over time.
❓Can I use this for loans in any country?
Yes, our simple interest calculator works for loans and investments worldwide. Simply enter amounts in your local currency.
❓Is this calculator free?
Yes, our simple interest calculator is completely free to use with no registration required.