Simple Interest Calculator
Calculate simple interest on a principal with any rate and time, in years and months. Get total amount payable and interest earned.
Total interest
₹6,000
End balance
₹26,000
Monthly interest
₹50
Over 120 months
Simple interest = principal × rate × time. Interest is only ever charged on the original principal — no compounding. Most savings accounts and credit cards compound instead; use the compound interest calculator for those.
How it works
Interest = P × r × t, where t is in years (months ÷ 12). End balance = P + interest.
Example: ₹20,000 at 3% for 10 years → ₹6,000 interest, ₹26,000 total.
Last updated: September 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Simple interest is the rule for money lent or borrowed between people rather than through banks — family loans for a wedding, help between friends for a business, or chit-fund style arrangements — and this calculator keeps those agreements transparent. It also applies to instruments and government schemes that pay interest without compounding. Enter the principal, the annual rate and the time in years and months to get the exact interest and the total amount payable, which is what an agreement should state in writing. For bank deposits and mutual funds, which compound, use the compound interest calculator instead; for informal lending between individuals, this simple-interest figure is the fair and familiar basis.
How to Use This Calculator
- Step 1: Enter the principal amount, such as the sum you are lending or borrowing.
- Step 2: Enter the annual interest rate as a percentage.
- Step 3: Enter the time in years and months, since the calculator adds the two to get the total term.
- Step 4: Read the interest earned and the total amount payable, which is principal plus interest.
Worked Example
A family in Lucknow lends ₹50,000 at 9% simple interest for 2 years and 6 months. Enter 50000 as the principal, 9 as the annual rate, 2 as the years and 6 as the months. The interest is 50000 × 9 × 2.5 / 100, which is ₹11,250, so the total amount payable is ₹61,250. The same loan for 3 full years gives ₹13,500 in interest, showing that simple interest grows in a straight line with time, unlike compound interest.
Tips and Common Mistakes
- •Tip 1: Simple interest is only ever computed on the original principal, so the interest amount is identical in every period.
- •Tip 2: Months are counted as twelfths of a year, so 6 months is 0.5 years and the calculator handles the fraction for you.
- •Tip 3: Use this tool for loans with no compounding, such as short personal loans between family, rather than for bank deposits which usually compound.
- ✗Mistake 1: Entering the rate as 0.09 instead of 9, which returns one-hundredth of the correct interest.
- ✗Mistake 2: Entering the total term in months while also filling the years field, which doubles the time.
Frequently Asked Questions
What is the simple interest formula?
Simple interest = principal × rate × time, where the rate is the annual rate as a decimal and time is in years. For ₹20,000 at 3% for 10 years: 20000 × 0.03 × 10 = ₹6,000 interest, ending at ₹26,000.
When is simple interest used in India?
Simple interest is standard for very short-term fixed deposits (under ~90 days), many small savings schemes, loan defaults and penal interest. Longer savings products almost always compound.
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal, so it grows linearly. Compound interest also earns interest on accumulated interest, so the balance grows faster over time — switch to the compound interest calculator to compare.
How do I calculate simple interest for months?
Convert the months into years by dividing by 12, then use the formula. The calculator does this automatically when you enter extra months.
Compare these tools
- Future Value Calculator — Find what your money grows into with compound interest at any frequency
- Gratuity Calculator (India) — Calculate gratuity under the Payment of Gratuity Act, 1972 with the 15/26 formula and the ₹20 lakh tax-exempt cap for Indian employees
- GST Calculator (India) — Add or remove GST from any amount, with CGST + SGST split for intra-state and IGST for inter-state supplies
You might also need
Related calculators from other categories
Science & Weather
Acceleration Calculator
Calculate acceleration from initial and final velocity over time, plus the distance covered. Handles speeding up and braking.
Health & Fitness
Army Body Fat Calculator
Estimate body fat percentage with the US Army circumference formula using neck and waist measurements. See your category instantly.
Math
Basic Calculator
Add, subtract, multiply and divide any two numbers instantly. A simple free calculator for everyday sums and quick checks.
Health & Fitness
Body Fat Calculator
Estimate body fat percentage with the US Navy method using tape measurements. Track your fitness progress accurately for men and women.