What is Simple Interest?
Simple Interest (SI) is the easiest way to calculate interest on a principal amount. Unlike compound interest, where interest is added to the principal periodically, simple interest is calculated only on the original principal amount throughout the entire duration.
Simple Interest Formula – How to Calculate SI
To calculate Simple Interest, the following formula is used:
SI = (P × R × T) / 100
Where:
- SI = Simple Interest
- P = Principal amount (the original sum invested or borrowed)
- R = Annual rate of interest (%)
- T = Time period in years
Total Amount Calculation Using Simple Interest
The total amount to be repaid or received at the end of the term is:
Total Amount = Principal + Simple Interest
How This Simple Interest Calculator Works
This calculator takes the principal amount, interest rate, and time period to compute:
- Simple Interest earned or payable
- Total amount after interest
Benefits of Using an Online Simple Interest Calculator
- Quick Estimations: Instantly find out how much interest you'll earn or owe.
- Transparent Calculations: No compounding involved, making the math straightforward.
- Great for Short-Term Loans or Deposits: Often used for car loans, personal loans, or fixed deposits with short tenures.
Example: Simple Interest Calculation Scenario
| Principal | Rate of Interest | Time Period | Simple Interest | Total Amount |
|---|---|---|---|---|
| ₹1,00,000 | 5% | 3 Years | ₹15,000 | ₹1,15,000 |
Use this calculator to easily assess returns or costs for loans, deposits, or investments where simple interest applies.
Explore more calculators: Compound Interest Calculator, Fixed Deposit Calculator, SIP Calculator