Simple Interest Calculator
Calculate simple interest on your principal amount. Interest is calculated only on the original principal, not on accumulated interest.
Formula
SI = (P × R × T) / 100
Interest = (1,00,000 × 8 × 5) / 100
Total Amount (After 5 Years)
₹1.40 L
Principal
₹1.00 L
Total Interest
₹40,000
Yearly Interest
₹8,000
Monthly Interest
₹667
Simple vs Compound Interest
With simple interest, you earn ₹40,000 over 5 years. With compound interest (yearly), you would earn ₹46,933. That's ₹6,933 more with compounding!
Understanding Simple Interest
What is Simple Interest?
Simple interest is calculated only on the principal amount. The interest earned each period remains constant and doesn't compound. It's used in some loans and basic savings calculations.
Linear Growth
Simple interest results in linear growth - the interest earned is the same each year. This makes calculations straightforward and predictable for short-term planning.
Common Uses
Simple interest is often used in car loans, personal loans, and consumer credit. Some savings accounts also use simple interest. For long-term growth, compound interest is more beneficial.