Finance & Investment · Interest
Simple Interest Calculator
Calculate simple interest and the total amount for any principal, annual rate and period — and see how much more the same money would earn with compound interest.
Your inputs
Quick start — try a typical case
₹ 1 lakh
Your result Live
Simple Interest
₹24,000
₹1,00,000 at 8% a year for 3 years
- Total Amount (P + I)
- ₹1,24,000
- Interest per Year
- ₹8,000
- Interest per Month
- ₹667
- With Annual Compounding Instead
- ₹1,25,971 (+₹1,971)
- Principal · 81%₹1,00,000
- Interest · 19%₹24,000
How this is calculated
SI = P × R × T ÷ 100 · Amount = P + SI
- P
- Principal
- R
- Rate of interest per year (%)
- T
- Time in years (months ÷ 12)
Simple interest is charged or earned only on the original principal, so it grows in a straight line. It is used for many short-term loans, some deposits and most school maths problems. Compound interest, by contrast, adds interest to the balance — the comparison row shows the difference.
Assumptions & sources
- The rate is per year and stays the same throughout.
- Periods in months are converted to years by dividing by 12 (no day-count convention).
- 1Investments (Bodie, Kane & Marcus), chapters on returns, compounding and the time value of money — McGraw-Hill
- 2CFA Program Curriculum — Quantitative Methods: The Time Value of Money — CFA Institute
Calculator ID FIN-INT-SI-001 · version 1.0.0
Common questions
What is the simple interest formula?
SI = P × R × T ÷ 100, where P is the principal, R the yearly rate in percent and T the time in years. For 18 months use T = 1.5.
Is simple interest better for a borrower?
For the same quoted rate, yes — simple interest grows more slowly than compound interest. But beware 'flat-rate' loans: they charge simple interest on the full original amount even as you repay it, which makes the effective rate much higher. The Flat vs Reducing Rate calculator shows this.