Simple Interest Calculator 2026
Flat-rate interest — no compounding. Quick math for short loans and basic deposits.
- Total amount
- ₹1.40 L
- You'll earn ₹40,000 as simple interest over 5 years.
Principal vs Interest
- Principal
- ₹1.00 L
- Interest
- ₹40,000
Year-by-year breakdown
- 1
- Interest this year
- ₹8,000
- Cumulative interest
- ₹8,000
- Balance
- ₹1.08 L
- 2
- Interest this year
- ₹8,000
- Cumulative interest
- ₹16,000
- Balance
- ₹1.16 L
- 3
- Interest this year
- ₹8,000
- Cumulative interest
- ₹24,000
- Balance
- ₹1.24 L
- 4
- Interest this year
- ₹8,000
- Cumulative interest
- ₹32,000
- Balance
- ₹1.32 L
- 5
- Interest this year
- ₹8,000
- Cumulative interest
- ₹40,000
- Balance
- ₹1.40 L
| Year | Interest this year | Cumulative interest | Balance |
|---|---|---|---|
| 1 | ₹8,000 | ₹8,000 | ₹1.08 L |
| 2 | ₹8,000 | ₹16,000 | ₹1.16 L |
| 3 | ₹8,000 | ₹24,000 | ₹1.24 L |
| 4 | ₹8,000 | ₹32,000 | ₹1.32 L |
| 5 | ₹8,000 | ₹40,000 | ₹1.40 L |
Growth chart
Simple Interest Formula
r is the yearly rate in percent and t is in years. Interest is charged on the original principal only, so every year adds the same amount: P × r ÷ 100.
About Simple Interest Calculator
Simple Interest (SI) is interest calculated only on the original principal — it does not compound on accumulated interest. It's the simplest interest model, used in short-term loans, some auto-loans, fixed deposits with periodic payouts, and many government certificates.
For longer durations, simple interest understates the real growth of money — that's where compound interest takes over and produces dramatically larger returns.
How it Works
- Principal (P) — the original amount lent or invested.
- Rate (r) — the annual interest rate, in percent.
- Time (t) — duration in years.
Benefits of Simple Interest
- Easy to compute mentally — no compounding.
- Predictable interest cost across the entire tenure.
- Used in many short-term loan products and certificate schemes.
- Useful as a baseline to compare against compound returns.
Simple vs Compound Interest
On ₹1,00,000 at 8% for 10 years: simple interest gives ₹80,000, while compound interest (yearly) gives roughly ₹1,15,892. The longer the tenure and the higher the rate, the bigger the gap. For long-term investing always think in compound terms.
References
Simple Interest FAQs
What is the formula for simple interest?
How does simple interest differ from compound interest?
Where is simple interest actually used in India?
How do I convert a flat interest rate to a reducing-balance rate?
Why does a car loan at 9% cost more than a home loan at 9%?
Is savings account interest simple or compound?
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