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SI = P × R × T ÷ 100

Simple interest calculator

Enter a principal, a yearly rate and a period to see the interest, the total payable and what that interest costs per month.

Short answer: simple interest is P × R × T ÷ 100. ₹1,00,000 at 10% for 2 years earns ₹20,000, so the total payable is ₹1,20,000 — the same ₹20,000 that never gets added back to earn more.

The formula, and why there is no compounding

Interest is charged on the original principal only. Year one earns ₹10,000; year two earns another ₹10,000 on the same ₹1,00,000, not on ₹1,10,000. That is why a simple-interest loan costs less than a compound one at the same rate, and why the gap widens with time.

Worked example

₹2,50,000 at 8.5% for 3 years: SI = 2,50,000 × 8.5 × 3 ÷ 100 = ₹63,750. Total payable ₹3,13,750, which is about ₹1,770 of interest per month. Change the fields above to check any other case.

Estimate, not a quote. Real loans add fees, penal interest and their own day count. This page shows the arithmetic, not the lender's terms.

Simple interest questions

What is the simple interest formula?

SI = P × R × T ÷ 100, where P is the principal, R the annual rate percent and T the time in years. The total payable is P + SI. Interest here is never added back to the principal, which is the whole difference from compound interest.

How do months and days work?

Enter the period in years, or switch the unit to months and the calculator divides by twelve. A day count is not offered: banks use 365 or 360 days depending on the product, and a number computed with the wrong convention looks correct.

Where is simple interest actually used?

Short-term loans, some personal loans, interest on late payment, and school problems where interest is not reinvested. Most deposits and term loans compound, so use the compound interest calculator for those.

Is this the interest a bank will charge me?

Not necessarily. This is arithmetic on the numbers you type. Lenders add processing fees, use their own day-count rules and may charge on a reducing balance, so the figure here is an estimate rather than a quote.

Related tools

Compound interest calculatorThe same principal when interest is reinvested.EMI calculatorReducing-balance loan instalments.CAGR calculatorAnnualised growth between two values.