Simple Interest Calculator
Calculate simple interest and maturity from principal, annual rate and years — with a clear year-wise schedule.
Last updated: 12 July 2026. Figures are illustrative — confirm rates and terms with your lender or bank.
What is simple interest?
Simple interest is calculated only on the original principal for the full tenure. Unlike compound interest, previously earned interest does not itself earn further interest. The accrual is linear: the same interest amount each year at a flat rate on principal.
It is widely taught in school maths and still appears in some short-term or informal lending. Most Indian bank deposits and mutual fund illustrations use compounding instead.
How simple interest is calculated
SI = (P × R × T) ÷ 100
P = principal, R = annual rate in percent, T = time in years. Maturity = P + SI.
Worked example: ₹1,00,000 at 8% for 5 years → SI = ₹40,000; maturity = ₹1,40,000. The same inputs with yearly compounding would mature higher — try the compound interest calculator.
When to use simple vs compound
| Feature | Simple interest | Compound interest | Loan EMI |
|---|---|---|---|
| Formula basis | Interest only on principal | Interest on principal + accrued interest | Reducing-balance loan amortisation |
| Growth over time | Linear — same interest each year at flat rate | Accelerates with frequency and tenure | Interest falls as principal is repaid |
| Common in India for | Some short-term loans, informal lending, teaching maths | FDs, savings, mutual fund illustrations | Home, car and personal loans |
| Best for | Quick flat-rate estimates | Long-term savings projections | Monthly repayment planning |
For reducing-balance loans, use the EMI calculator. For bank term deposits, prefer the FD calculator.
Taxation note
Interest income is generally taxable unless a specific exemption applies. This calculator shows gross interest only and does not model TDS or slab tax.
Who should use a simple interest calculator?
Students checking homework formulae, borrowers comparing a flat-rate quote, or anyone who wants a quick linear estimate before switching to compound or EMI maths for real products.
Frequently asked questions about simple interest
What is simple interest?
Simple interest is calculated only on the original principal for the entire tenure. It does not earn interest on previously accrued interest.
How is simple interest calculated?
SI = (P × R × T) ÷ 100, where P is principal, R is annual rate in percent, and T is time in years. Maturity = P + SI.
When is simple interest used in India?
It appears in school maths, some short-term or informal lending, and occasional product disclosures. Most bank FDs and recurring deposits use compound interest instead.
Simple vs compound interest — which is higher?
For the same principal, rate and tenure longer than one compounding period, compound interest produces a higher maturity because interest itself earns interest. Use both calculators to compare.
Does this calculator support months?
Enter tenure in years (including decimals if needed conceptually via the years control). For loan EMIs with monthly repayment, use the EMI calculator instead.
Is FD interest simple or compound?
Cumulative bank FDs in India usually compound quarterly. Some products or illustrations quote simple interest. Check the FD calculator for bank-style compounding options.
Is interest earned taxable?
Interest income is generally taxable under the Income Tax Act unless a specific exemption applies (for example PPF). This calculator shows gross interest only.
What does the year-wise schedule show?
It spreads the total simple interest across years for readability. Under classic simple interest, each full year accrues P × R ÷ 100 on the original principal.
Can I use this for personal loans?
Only if the lender quotes a flat simple-interest rate on the original principal. Most retail loans use reducing-balance EMI — use the EMI calculator for those.
What is a worked example?
₹1,00,000 at 8% p.a. for 5 years → SI = 1,00,000 × 8 × 5 ÷ 100 = ₹40,000; maturity = ₹1,40,000.
Simple interest on ₹2 lakh at 10% for 3 years — how much total amount?
Interest = P × R × T / 100; amount = P + interest. For ₹2 lakh at 10% for 3 years, interest is ₹60,000 if purely simple. Many modern loans use reducing-balance EMI instead.
Is education loan interest calculated as simple interest during moratorium in India?
Some education loans accrue simple interest in the study/moratorium period, then switch to EMI on a compounded outstanding — terms vary by lender. Enter the method your sanction letter describes; verify with the bank.
Disclaimer: Educational only. Product terms, day-count conventions and tax rules can differ. Not financial advice.
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