Simple Interest is calculated on the principal amount for a fixed period at a fixed rate of interest.
Formula:
Simple Interest (SI) = (P × R × T) / 100
Where:
This calculation is helpful for fixed deposits, short-term loans, or any lending that doesn’t involve compounding interest.
The Simple Interest Calculator helps you compute interest earned or payable on loans and deposits over a specified period. Whether you're a student learning finance basics, a borrower evaluating loan costs, or an investor checking earnings, this tool gives accurate results in seconds.
Simple Interest (SI) is a method to calculate interest based solely on the original principal amount. It does not involve compounding, making it straightforward and ideal for short-term financial transactions, small loans, and fixed deposits with simple return structures.
SI = (P × R × T) / 100
Where:
Suppose you invest ₹10,000 at an annual interest rate of 5% for 3 years:
| Criteria | Simple Interest | Compound Interest |
|---|---|---|
| Calculation | Only on principal | On principal + accumulated interest |
| Formula | (P × R × T)/100 | P(1 + R/100)T – P |
| Complexity | Easy | Moderately complex |
| Returns | Lower | Higher over time |
If your time period is in months:
T = Number of Months ÷ 12
Example: 6 months = 6/12 = 0.5 years
Borrow ₹20,000 at 12% for 1 year:
Invest ₹50,000 at 6% for 2 years:
Lend ₹5,000 at 8% for 6 months:
Yes. Convert months into years and input it into the calculator. For example, 6 months = 0.5 years.
Simple interest is calculated only on the principal. Compound interest includes interest on interest, giving a higher return over time.
Yes. Since SI is based on percentage values, you can use it with ₹, $, €, or any other currency.
Absolutely. It works both ways — whether you’re lending, borrowing, or investing.
The Simple Interest Calculator is a handy tool for quickly evaluating the cost or earnings from any financial transaction involving fixed interest. It's easy to use, educational, and effective for both personal and professional use.
Try Easy Converters’ Simple Interest Calculator now — and take control of your money with clarity and confidence!
While Simple Interest (SI) is often considered a basic financial concept, it has many practical applications across industries and day-to-day life. Here are advanced use cases:
Microfinance institutions typically use simple interest for small loans given to farmers, artisans, or self-help groups. The calculator allows borrowers and lenders to understand repayment expectations without needing complex math or software.
Many central and state government schemes — such as education loans, agriculture loans, or women's empowerment loans — offer interest subsidies or fixed interest rates using SI. This calculator helps applicants and officials plan repayments transparently.
Legal documents involving private lending often state “X% simple interest per annum.” Our calculator helps both parties stay clear about interest due over time and ensure compliance.
Some companies offer salary advances to employees with a fixed monthly or annual SI. Employees can use this tool to determine how much they owe on repayment dates.
Businesses may charge late fees based on simple interest — especially in contracts. For example, “Interest at 15% p.a. will be charged on overdue invoices.” This calculator determines the exact payable amount for any delay duration.
Although SI is usually calculated yearly, it can be adjusted for:
This is especially helpful when calculating short-term interest or penalties on delayed payments.
Loan: ₹5,000, Rate: 12% p.a., Time: 2 months
Simple Interest is a fundamental concept in school and college curricula under mathematics and commerce streams. It builds the foundation for understanding compound interest, annuities, EMIs, and ROI.
Students can use the calculator to:
While the calculator is designed with INR in mind, it works perfectly with all global currencies (USD, EUR, AED, GBP, etc.). That’s because SI is a percentage-based calculation, not dependent on currency format.
If R = 0, then SI = ₹0 regardless of time. This is useful for no-interest periods in promotional loans.
Time must always be positive. If a negative value is entered, the tool can reject the input and prompt correction.
For variable interest rates, calculate SI separately for each period. Our calculator allows you to simulate this by changing R accordingly.
For non-integer durations (e.g., 1.75 years), the formula still holds true. Just input the decimal form of the time.
In SI, interest remains constant over time. But in reducing balance method (used in many EMI structures), interest is applied on remaining principal, reducing gradually. This is why EMI calculators and SI calculators show different results for the same data.
No. This calculator only handles simple interest. For compound interest calculations, use our Compound Interest Calculator.
SMEs can use this calculator to manage receivables, apply late payment interest, or prepare loan agreements.
If you save the webpage or download the HTML source, yes. However, for best experience, use it online with live updates.
No. The calculator assumes a single currency input. Use a currency converter separately if comparing global values.
Simple Interest is more than a basic formula — it's a gateway to understanding how money grows or what borrowing really costs. From school-level math to real-life lending, this principle shows up everywhere.
Easy Converters' Simple Interest Calculator makes financial literacy practical. It empowers students, supports business decisions, and helps every user feel more confident with numbers. Try it today and make every rupee — or dollar — count wisely.