Simple Interest Calculator
Calculate simple interest on loans or deposits with our free online SI calculator. Get instant results with principal, rate, and time inputs.
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Enter Loan/Deposit Details
Principal vs Interest
Principal Amount
₹1,00,000
Total Interest
₹40,000
Total Amount
₹1,40,000
Monthly Interest
₹667
Simple Interest Formula
SI = (P × R × T) / 100
= (₹1,00,000 × 8% × 5.00 years) / 100 = ₹40,000
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What is Simple Interest?
Simple Interest (SI) is a method of calculating interest where the interest is computed only on the principal amount for the entire tenure. Unlike compound interest, the interest does not earn interest on itself. Simple interest is commonly used in short-term loans, car loans, and some savings accounts.
The formula is straightforward and easy to calculate, making it popular for quick financial calculations and understanding basic interest concepts.
Simple Interest Formula
SI = (P × R × T) / 100
- SI = Simple Interest
- P = Principal (Initial Amount)
- R = Rate of Interest (per annum)
- T = Time Period (in years)
Total Amount (A) = P + SI = P × (1 + R×T/100)
Example Calculation
Problem: Calculate simple interest on ₹50,000 at 10% p.a. for 3 years
- Principal (P): ₹50,000
- Rate (R): 10%
- Time (T): 3 years
- SI: (50,000 × 10 × 3) / 100 = ₹15,000
- Total Amount: ₹50,000 + ₹15,000 = ₹65,000
Simple Interest vs Compound Interest
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Interest Calculation | On principal only | On principal + accumulated interest |
| Interest Growth | Linear | Exponential |
| Total Interest | Lower | Higher |
| Common Uses | Short-term loans, car loans | FDs, savings, investments |
Where Simple Interest is Used
- Personal Loans: Some personal loans use simple interest calculation
- Car Loans: Many auto loans in India use simple interest
- Short-term Deposits: Some short-term bank deposits
- Consumer Credit: Store credit and consumer financing
- Education Loans: During the moratorium period
Frequently Asked Questions
Disclaimer
This calculator is provided for informational purposes only. The results are estimates and should not be considered as financial advice. Actual values may vary based on various factors. Please consult a certified financial advisor before making any financial decisions.
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