Simple Interest Calculator

What This Simple Interest Calculator Does

Simple interest is calculated only on the original principal amount, for the entire duration - unlike compound interest, previously-earned interest never itself earns further interest. This calculator computes the interest earned and total amount for a principal at a fixed annual rate over a chosen number of years.

The Formula

Simple Interest = P × r × t, where P is the principal, r is the annual interest rate (as a decimal), and t is the time in years. The total amount is simply the principal plus this interest. Because the base never grows, the interest earned each year is identical, unlike compound interest where it grows over time.

How to Use It

Enter your principal amount, the annual interest rate, and the time period in years. The result shows the interest earned and the total amount at the end of the period, updating live as you adjust any input.

Simple vs Compound Interest

For short periods the difference between simple and compound interest is small, but it grows the longer money is invested, since compound interest benefits from interest earning interest. Simple interest is mostly used for shorter-term loans and some specific deposit products; most long-term investments, including mutual funds and typical bank deposits, effectively compound. Use the Compound Interest Calculator to see the same principal and rate grow with compounding instead.

Who This Is For

Anyone calculating interest on a product that explicitly uses simple interest - certain short-term loans or deposits - or who wants a baseline comparison against compound growth to see how much compounding actually adds over time.

Quick Example

₹2,00,000 at 9% simple interest for 6 years earns exactly ₹1,08,000 in interest, for a total of ₹3,08,000 - compare that to the ₹3,41,153 the same principal and rate would reach under quarterly compound interest, and the gap is entirely down to compounding.