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Simple Interest Calculator (2026)
Calculate SI instantly. Find interest, or reverse-calculate principal, rate, or time.
₹1,00,000 @ 8% for 3 years → Interest: ₹24,000 | Total: ₹1,24,000
Loan / Deposit Details
₹1.0 L
₹10,000₹50,00,000
8%
1%30%
3 years
1 yrs30 yrs
SI = (₹1.0 L × 8 × 3) / 100
Principal Amount₹1,00,000
Interest Earned₹24,000
Total Amount₹1,24,000
Year-wise Breakdown
| Year | Interest (Year) | Cumulative Interest | Total Amount |
|---|---|---|---|
| 1 | ₹8,000 | ₹8,000 | ₹1,08,000 |
| 2 | ₹8,000 | ₹16,000 | ₹1,16,000 |
| 3 | ₹8,000 | ₹24,000 | ₹1,24,000 |
Simple Interest Formula and What Each Variable Means
SI = (P × R × T) / 100
To find total amount: A = P + SI = P × (1 + RT/100)
| Variable | What It Means | Example |
|---|---|---|
| SI | Simple Interest earned or paid | ₹24,000 |
| P | Principal — the original amount | ₹1,00,000 |
| R | Annual interest rate (in %) | 8% |
| T | Time period in years | 3 years |
| A | Total Amount = P + SI | ₹1,24,000 |
Simple Interest Calculation Examples
Example 1 — Personal Loan
Ramesh takes a personal loan of ₹2,00,000 at 12% per annum for 2 years.
SI = (2,00,000 × 12 × 2) / 100 = ₹48,000
Total repayment = ₹2,00,000 + ₹48,000 = ₹2,48,000
Example 2 — Fixed Deposit (Short-term)
Sunita deposits ₹50,000 at 6.5% for 18 months (1.5 years).
SI = (50,000 × 6.5 × 1.5) / 100 = ₹4,875
Maturity value = ₹50,000 + ₹4,875 = ₹54,875
Example 3 — Government Bond
An investor buys a government bond worth ₹5,00,000 at 7.2% p.a. for 5 years.
SI = (5,00,000 × 7.2 × 5) / 100 = ₹1,80,000
Total value at maturity = ₹5,00,000 + ₹1,80,000 = ₹6,80,000
Simple Interest vs Compound Interest — Which Is Better?
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Interest calculated on | Principal only | Principal + accumulated interest |
| Formula | SI = (P × R × T) / 100 | A = P × (1 + R/100)^T |
| Growth | Linear (same every year) | Exponential (grows faster over time) |
| Better for | Borrowers (pay less) | Investors (earn more over time) |
| Used in | Personal loans, short FDs | Savings accounts, long-term FDs, SIPs |
| Example (₹1L, 8%, 3yr) | Interest = ₹24,000 | Interest = ₹25,971 |
Key insight: For short periods (1–2 years), the difference between SI and CI is small. Over 10+ years, compound interest creates dramatically more wealth for investors — and dramatically more cost for borrowers.
How to Find Principal, Rate, or Time from Simple Interest
Sometimes you know the interest amount but need to find another variable. Use these reverse formulas:
| What to Find | Formula | Example |
|---|---|---|
| Principal (P) | P = (SI × 100) / (R × T) | SI=₹24,000, R=8%, T=3yr → P = ₹1,00,000 |
| Rate (R) | R = (SI × 100) / (P × T) | SI=₹24,000, P=₹1L, T=3yr → R = 8% |
| Time (T) | T = (SI × 100) / (P × R) | SI=₹24,000, P=₹1L, R=8% → T = 3 years |
Use the reverse calculator tabs above to find any missing variable instantly without manual calculation.
Interest Amount on ₹1 Lakh at Different Rates and Durations
| Rate \ Years | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| 6% | ₹6,000 | ₹12,000 | ₹18,000 | ₹30,000 |
| 7% | ₹7,000 | ₹14,000 | ₹21,000 | ₹35,000 |
| 8% | ₹8,000 | ₹16,000 | ₹24,000 | ₹40,000 |
| 10% | ₹10,000 | ₹20,000 | ₹30,000 | ₹50,000 |
| 12% | ₹12,000 | ₹24,000 | ₹36,000 | ₹60,000 |
All values for ₹1,00,000 principal using SI = (P × R × T) / 100. Highlighted row = default example.
When Do Banks and Lenders Use Simple Interest in India?
- •Personal loans from banks and NBFCs (most charge SI on reducing balance, not flat SI)
- •Short-term loans under 1 year from cooperative societies and moneylenders
- •Government savings bonds and some post office schemes
- •Partial payment situations — EMI payments are typically calculated using a reducing balance SI method
Note: Most modern bank FDs, savings accounts, and home loans use compound interest, not simple interest. If a lender quotes a flat rate, convert it to an effective annual rate for comparison: Effective Rate ≈ 2 × Flat Rate / (n+1) where n = number of EMIs.
Frequently Asked Questions — Simple Interest Calculator
What is the simple interest formula in maths?
SI = (P × R × T) / 100, where P is the principal, R is the annual interest rate in %, and T is time in years. Total amount: A = P + SI. Example: ₹1,00,000 at 8% for 3 years → SI = (1,00,000 × 8 × 3)/100 = ₹24,000, total = ₹1,24,000.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal — same amount every year. Compound interest is calculated on principal plus accumulated interest — it grows faster over time. For ₹1 lakh at 8% for 3 years: SI gives ₹24,000 while CI (compounded annually) gives ₹25,971 — a difference of ₹1,971.
How do I find the principal if I know the simple interest?
Use: P = (SI × 100) / (R × T). Example: SI = ₹24,000, rate = 8%, time = 3 years → P = (24,000 × 100) / (8 × 3) = ₹1,00,000. Use the "Find Principal" tab in the calculator above.
Is EMI calculated on simple interest or compound interest?
Most bank EMI loans use a reducing balance method — a form of compound interest where interest is calculated monthly on outstanding principal. As you pay EMIs, the outstanding principal reduces, so the interest component decreases over time. Flat rate SI loans are less common and typically more expensive in total cost.
What is the simple interest on ₹10,000 at 10% for 2 years?
SI = (10,000 × 10 × 2) / 100 = ₹2,000. Total amount = ₹10,000 + ₹2,000 = ₹12,000. Verification: 10% of ₹10,000 = ₹1,000 per year × 2 years = ₹2,000.
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Content by Satyapal Khakhal, Founder, gpaisa.in | Updated: May 2026