Simple Interest Calculator

Calculate simple interest on any principal.

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Simple interest is charged or earned only on the original principal, never on interest that has already been added. This simple interest calculator takes the principal, the annual rate and the time in years, and returns the interest along with the total amount repayable. It is handy for checking maths homework and for working out a short-term loan between friends or family.

The formula: SI = P × R × T ÷ 100

P is the Principal, R the Rate (% p.a.) and T the Time (years). The total amount is P + SI, which can also be written as A = P × (1 + R × T ÷ 100).

₹50,000 at 12% for 2 years: 50,000 × 12 × 2 ÷ 100 = ₹12,000 interest, total ₹62,000.
₹2,00,000 at 7.5% for 3 years: 2,00,000 × 7.5 × 3 ÷ 100 = ₹45,000 interest, total ₹2,45,000.

Entering time in months or days

The time field is in years, so convert shorter periods first. Nine months is 9 ÷ 12 = 0.75 years, and ₹50,000 at 12% for 0.75 years earns ₹4,500. For days, divide by 365: 146 days is 0.4 years, so the same loan would cost ₹2,400 in interest.

Rearranging the formula for exam questions

Simple interest is a standard topic in middle-school maths across CBSE and state board syllabi, and exam questions often ask for the unknown principal, rate or time:

P = 100 × SI ÷ (R × T)
R = 100 × SI ÷ (P × T)
T = 100 × SI ÷ (P × R)

Example: at what rate does ₹8,000 become ₹10,000 in 5 years? SI = 2,000, so R = 100 × 2,000 ÷ (8,000 × 5) = 5% per year. To check the answer, enter 8,000, 5 and 5 above and confirm the total is ₹10,000.

"₹2 per hundred per month" and other everyday rates

Informal lenders and chit-style arrangements often quote interest per ₹100 per month. ₹2 per hundred per month means 2% a month, which is 24% a year, so enter 24 as the rate. ₹1.5 per hundred per month is 18% a year. Writing the yearly figure down this way makes a "small" monthly rate much easier to compare with a bank loan.

Simple versus compound interest

Simple interest is used for many short-term arrangements, some gold loans, flat-rate calculations and interest on certain deposits under six months. Most savings products and long loans compound instead. Over short periods the two barely differ, but over long ones the gap is large: ₹1,00,000 at 8% for 10 years earns ₹80,000 of simple interest but ₹1,15,892.50 when compounded yearly. See the difference for your own numbers with the Compound Interest Calculator. The results here are estimates, not financial advice.

Frequently asked questions

What is the formula for simple interest?

SI = P × R × T ÷ 100, where P is the principal, R the yearly rate in percent and T the time in years. Add SI to P for the total amount.

How do I calculate simple interest for a number of months?

Divide the months by 12 and enter the result as the time. Six months is 0.5 years and 18 months is 1.5 years.

What does ₹2 per hundred per month mean as a yearly rate?

It means ₹2 of interest on every ₹100 each month, which is 2% a month or 24% a year.

When is simple interest used instead of compound interest?

Mostly for short-term loans, some gold loans, flat-rate quotes and school maths problems. Longer deposits and loans generally compound.

How do I find the rate if I know the interest?

Use R = 100 × SI ÷ (P × T). ₹1,500 of interest on ₹10,000 over 3 years is a 5% annual rate.