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Simple Interest Calculator
Calculate simple interest earned or paid on any principal amount with a fixed annual interest rate.
About This Calculator
Simple interest is calculated only on the original principal amount, without compounding. It is used in short-term loans, car loans, personal loans, and some savings instruments. The formula is straightforward: Interest = Principal × Rate × Time / 100.
How to Use This Calculator
- 1Enter the principal amount
- 2Enter the annual interest rate
- 3Enter the time period and select years, months, or days
- 4Click Calculate to see interest and total amount
Formula Used
Simple Interest = (Principal × Rate × Time) / 100
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FAQ
Frequently Asked Questions
Common questions about the simple interest calculator answered.
When is simple interest used?+
Simple interest is commonly used for short-term personal loans, car loans, savings bonds, treasury bills, and some bank accounts. Many payday loans and peer-to-peer lending platforms also use simple interest calculations for transparency.
Is simple interest better than compound interest?+
As a borrower, simple interest is better since you pay less over time. As an investor or lender, compound interest is better since you earn more. For example, Rs 10,000 at 8% for 3 years: simple interest gives Rs 2,400 while compound interest monthly gives Rs 2,702.
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