Simple Interest Calculator
Calculate simple interest and maturity amount, or solve for the rate or time needed to reach a target, using SI = P × R × T ÷ 100.
Tool guide
What this tool does
The Simple Interest Calculator finds interest earned or owed on the original principal only. It accepts time in years, months or days with an Actual/365 or Actual/360 day count, and can work backwards to find the rate or time required for a given maturity amount.
Simple interest is charged or earned only on the original principal, never on interest already accrued. It is used for many short-term loans, informal lending between people, some bonds, car loans in certain markets and in school maths problems. Because interest does not compound, the balance grows in a straight line: ₹50,000 at 7.5% for 3 years earns ₹11,250, exactly ₹3,750 each year.
The calculator applies SI = P × R × T ÷ 100. Time can be entered in years, months (divided by 12) or days, where you choose Actual/365 or the Actual/360 banker’s rule used in some money markets. Two reverse modes rearrange the formula to give the rate R = SI × 100 ÷ (P × T) or the time T = SI × 100 ÷ (P × R) needed to reach a target amount.
How to use Simple Interest Calculator
- Choose what to calculate: interest and total amount, the rate needed, or the time needed.
- Enter the principal.
- Enter the interest rate per year, or the target maturity amount for the reverse modes.
- Enter the time and choose whether it is in years, months or days.
- For days, pick the Actual/365 or Actual/360 day-count basis.
- Read the interest, total amount and the yearly table; the comparison card shows what the same rate would earn with yearly compounding.
Tips for better results
- For a loan quoted as a flat rate, the effective reducing-balance rate is much higher, often close to double; compare using the EMI calculator.
- Actual/360 gives slightly more interest than Actual/365 for the same quoted rate because each day counts as a larger fraction of the year.
- Use the comparison card to see how much compounding would add over longer periods.
Common use cases
- Working out interest on a personal loan given to a friend or family member.
- Checking homework and exam answers for principal, rate and time problems.
- Calculating interest for a specific number of days on overdue invoices.
- Finding the rate implied when an amount grows to a known figure.
Common mistakes to avoid
- Entering months as years: 18 months is 1.5 years, not 18.
- Treating a flat-rate loan as if it had the same cost as a reducing-balance loan at that rate.
- Using simple interest for long-term deposits that actually compound quarterly.
Frequently asked questions
What is the simple interest formula?
SI = P × R × T ÷ 100, where P is the principal, R the annual rate in percent and T the time in years. The total amount is P + SI.
How do I calculate simple interest for days?
Divide the number of days by 365 (or by 360 if your agreement uses the banker’s rule) to get T in years, then apply the usual formula. Choose Days in the Time in field to let the tool do it.
How is simple interest different from compound interest?
Simple interest is earned on the principal only, so it grows linearly. Compound interest is also earned on past interest, so it grows exponentially and is larger for any period longer than one compounding interval.
Can I find the rate if I know the final amount?
Yes. Choose Rate needed for a target amount, enter the principal, the amount at maturity and the time, and the calculator returns R = (A − P) × 100 ÷ (P × T).
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