Simple Interest Calculator
Calculate simple interest quickly with our free online calculator. Find interest on loans, fixed deposits, or any financial instrument using simple interest formula.
Simple vs Compound Interest
Year-by-Year Breakdown
| Year | Opening Balance | Interest Earned | Closing Balance (SI) | Closing Balance (CI) |
|---|
Simple Interest Formula
Key Features
How to Use This Calculator
Understanding Simple Interest
Simple interest is the most basic form of interest calculation, where interest is computed only on the principal amount, not on accumulated interest. Our Simple Interest Calculator makes these calculations quick and easy.
The simple interest formula is: SI = P × R × T / 100, where P is principal, R is annual rate of interest, and T is time in years. The total amount is: A = P + SI.
Simple interest is commonly used for short-term loans, car loans, and some fixed deposits. Unlike compound interest, the interest amount remains constant each period because it's always calculated on the original principal.
While simple interest is easier to understand and calculate, it results in lower total interest compared to compound interest for the same rate and time. This benefits borrowers but means lower returns for investors.
Understanding simple interest is fundamental to financial literacy. It helps you evaluate loan offers, verify bank calculations, and understand the basic mechanics of how money grows or accrues debt.