Simple Interest Calculator

Simple Interest is the foundational concept of interest calculation: interest is calculated ONLY on the principal amount, never on accumulated interest. Using the formula SI = P × R × T / 100, the total amount owed/earned is Principal + Simple Interest. On ₹1 lakh at 10% for 3 years, SI = ₹30,000, so total = ₹1.30 lakh. Simple interest grows linearly—each year adds the same amount of interest. While simple interest is less common in modern banking and FDs (which use compound), it's still used in Government Securities, bonds, Treasury bills, and some short-term loans. In personal finance context, simple interest generally favors lenders (lower repayment on loans) but disadvantages savers (lower returns vs compound). Understanding simple interest is important for comparing short-term investments (where simple and compound are similar) and recognizing why compound interest is almost always better for savers. This calculator helps you understand what you'd earn under simple interest, then compare it to compound interest options for the same investment.