Simple interest calculator

Simple interest is charged only on the original amount, never on interest already added. It is common for informal loans, some gold loans and short-term deals.

Use decimals for months, e.g. 1.5 for 18 months.
Total amount
₹1,24,000 (1.24 lakh)
Simple interest₹24,000
Interest per year₹8,000

Worked example

₹1,00,000 at 8% a year for 3 years earns 1,00,000 × 8 × 3 ÷ 100 = ₹24,000 of simple interest, so the total is ₹1,24,000.

Questions people ask

What is the simple interest formula?

Simple interest = P × R × T ÷ 100, where P is the principal, R the yearly rate and T the time in years. The total amount is P plus the interest.

How do I use months or days?

Convert to years: 18 months is 1.5 years, and 90 days is 90 ÷ 365 years. Some lenders use 360 days, so check the agreement.

Simple or compound interest: which is higher?

Compound interest is always higher for the same rate over more than one compounding period, because interest earns interest. Use our compound interest calculator to compare.

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Results are estimates for information only, not financial or tax advice. Rates, rules and limits change, so check with your bank, employer or a qualified adviser before you decide.