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Simple Interest Calculator
Calculate simple interest on loans and savings schemes
Calculate Simple Interest
₹
%
Yr
Simple interest
₹40,000
Total amount
₹1,40,000
Principal amount
₹1,00,000
Interest Accumulation Over Time
Principal
₹1,00,000
Total Interest
₹40,000
Simple Interest vs Compound Interest
Difference: Compound interest would give you ₹6,933 more over 5.0 years
Year-by-Year Breakdown
Year 1(Interest: ₹8,000)
₹1,08,000Year 2(Interest: ₹8,000)
₹1,16,000Year 3(Interest: ₹8,000)
₹1,24,000Year 4(Interest: ₹8,000)
₹1,32,000Year 5(Interest: ₹8,000)
₹1,40,000Calculation Breakdown
Principal Amount₹1,00,000
Interest Rate (p.a)8.00%
Time Period5.00 years
Annual Interest₹8,000
Total Simple Interest₹40,000
Total Amount₹1,40,000
Return Percentage40.00%
Understanding Simple Interest
What is Simple Interest?
Simple interest is calculated only on the principal amount, not on accumulated interest. It's a straightforward calculation where interest remains constant each year.
Formula:
Simple Interest = (Principal × Rate × Time) / 100
Total Amount = Principal + Simple Interest
When is Simple Interest Used?
- • Short-term loans (personal loans, car loans)
- • Gold loans and pawn shop loans
- • Some savings schemes
- • Fixed deposit interest (in some cases)
- • Educational loans (often use simple interest)
Simple vs Compound Interest:
- • Simple Interest: Interest calculated only on principal (lower returns)
- • Compound Interest: Interest calculated on principal + accumulated interest (higher returns)
- • Simple interest is predictable and easier to calculate
- • Compound interest grows faster over longer periods
Disclaimer: This calculator is for estimation purposes only. Results are approximate and may vary from actual values. Please consult with a financial advisor for personalized advice.