Simple Interest Calculator

Lending money to a relative, checking a loan offer, or solving a maths problem? This simple interest calculator applies the classic formula SI = P × R × T ÷ 100 and shows the interest, the total amount, the interest per month and — for comparison — what the same deal would cost with yearly compounding. Time can be entered in years, months or days.

How to use it

Enter the principal (the amount lent or borrowed).
Enter the yearly interest rate. For a monthly rate such as “2% per month”, enter 24%.
Enter the time and choose years, months or days.

Formula

SI = P × R × T ÷ 100 · Amount = P + SI

Example

You lend ₹50,000 to a friend at 12% a year for 18 months. Time = 1.5 years, so SI = 50,000 × 12 × 1.5 ÷ 100 = ₹9,000, and they repay ₹59,000 — ₹500 interest each month. Beware of informal loans quoted per month: “2 rupees per hundred per month” is 24% a year. For deposits that compound, use the compound interest calculator; for loans repaid monthly, theEMI calculator.

Disclaimer: Results are estimates for educational purposes only and are not financial, investment or tax advice. Please verify with your bank, broker or a SEBI-registered adviser before acting. Read the full disclaimer.

Frequently asked questions

What is the simple interest formula?

Simple Interest = P × R × T ÷ 100, where P is the principal, R the yearly rate and T the time in years. The total amount repaid is P + SI.

What is the difference between simple and compound interest?

Simple interest is charged only on the original principal. Compound interest is charged on the principal plus interest already added, so it grows faster. ₹1 lakh at 10% for 3 years earns ₹30,000 simple interest but ₹33,100 compounded yearly.

How do I calculate interest for months or days?

Convert the time into years: 8 months = 8 ÷ 12 years, and 90 days = 90 ÷ 365 years. Choose months or days in the calculator and it does this for you.

Where is simple interest used in India?

In many informal and short-term loans between people, some gold loans, interest on delayed payments, and school maths. Bank deposits and most loans use compound interest or reducing-balance EMIs instead.