Simple Interest Calculator
Simple interest is calculated only on the principal amount — unlike compound interest, it does not earn interest on interest. Use this for personal loans, short-term savings, or academic problems.
Frequently Asked Questions
What is the formula for simple interest?+
Simple Interest = (Principal × Rate × Time) / 100, abbreviated as SI = P × R × T / 100. The total amount returned is Principal + Simple Interest.
When is simple interest used in real life?+
Simple interest is used for short-term personal loans, vehicle loans in some cases, and as an approximation for quick mental calculations. Most Indian banks use compound interest for savings products, but some short-term instruments use simple interest.
What is the difference between simple interest and compound interest?+
Simple interest is always calculated on the original principal. Compound interest is calculated on the principal plus accumulated interest. Over time, compound interest grows significantly faster than simple interest at the same rate.