Simple Interest Calculator
Simple interest is charged only on the original principal — never on interest already earned. It's the maths behind many short-term loans, some deposits and most mental-arithmetic estimates.
The formula is deliberately plain: interest = principal × rate × time ÷ 100. Useful to know exactly, and useful as a baseline for seeing how much extra compound interest adds over the same period.
Total amount
₹1,40,000
Interest
₹40,000
Principal
₹1,00,000
How it works
- 01Interest = Principal × Rate × Time ÷ 100 — a straight line, the same amount added every year.
- 02The total is simply principal plus interest.
- 03The chart is a straight ramp, unlike compound interest which curves upward as interest earns interest.
Frequently asked
Simple or compound interest — which is better for me?+
As a saver, you want compound. As a borrower, simple interest costs you less because it never charges interest on interest. Always check which one applies before you sign.
When is simple interest actually used?+
Many car and personal loans, some government schemes, and short bridging loans. Longer-term deposits and credit cards almost always compound.