Calculate simple interest for any time period — years, months, or days. See monthly and daily interest, compare with compound interest. Free simple interest calculator.
Calculate SI quickly
Simple Interest
₹40,000
Total Amount
₹1,40,000
Principal vs Interest
Simple vs Compound Interest
Simple Interest (SI) is interest calculated only on the original principal amount. Unlike compound interest, it does not include interest on accumulated interest. The interest earned each year remains the same.
SI = P × R × T / 100
Total Amount = P + SI
Where:
For ₹1,00,000 at 10% for 5 years:
The gap widens significantly over longer periods and higher rates.
Flat rate (simple interest) calculates interest on the full principal for the entire loan period. Reducing balance calculates interest on the outstanding principal, which decreases as you pay EMIs. A flat rate of 10% is roughly equivalent to a reducing balance rate of 17-18%.
Most banks use compound interest for savings accounts and FDs. However, some personal loans and car loans advertised as "flat rate" use simple interest. Always compare the effective annual rate (EAR) rather than the stated rate to make fair comparisons.
Convert the time to years: For months, divide by 12. For days, divide by 365. Example: SI for 90 days = P × R × (90/365) / 100. Our calculator supports all three time units for convenience.
Yes, for periods longer than 1 compounding cycle, compound interest is always greater than simple interest (assuming the same rate and principal). For exactly 1 year with annual compounding, they are equal. For periods less than 1 compounding cycle, SI can be slightly more.
P = (SI × 100) / (R × T). If you earned ₹10,000 interest at 8% in 2 years, the principal was: P = (10,000 × 100) / (8 × 2) = ₹62,500.
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