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Simple interest calculator
Interest on the original sum only: principal × rate × time.
Quick answer
Simple interest is charged on the original principal only, so it adds the same amount every year. Formula: Simple interest = P × R × T ÷ 100. ₹1,00,000 at 8% for 3 years earns ₹24,000 in simple interest, for a total of ₹1,24,000.
Read the guide: How to calculate simple interest, with examples
Simple interest
₹24,000
- Total amount
- ₹1,24,000
- Interest every year
- ₹8,000
How is simple interest calculated?
Simple interest is the same every year because it is worked out on the original principal only.
It is used in some short-term loans, school maths and quick estimates. Most savings and loans use compound interest instead.
Enter time in years; for months, divide by 12 (6 months = 0.5 years).
What is the formula for simple interest?
- Simple interest = P × R × T ÷ 100
- Total amount = P + simple interest
- P = principal, R = rate per year (%), T = time in years
Can you show a worked example of simple interest?
P = ₹1,00,000, R = 8%, T = 3 years: interest = 1,00,000 × 8 × 3 ÷ 100 = ₹24,000, so the total is ₹1,24,000.
How much simple interest does ₹1 lakh earn?
Simple interest on ₹1,00,000, at each yearly rate.
| Time | 6% | 8% | 10% | 12% |
|---|---|---|---|---|
| 1 year | ₹6,000 | ₹8,000 | ₹10,000 | ₹12,000 |
| 2 years | ₹12,000 | ₹16,000 | ₹20,000 | ₹24,000 |
| 3 years | ₹18,000 | ₹24,000 | ₹30,000 | ₹36,000 |
| 5 years | ₹30,000 | ₹40,000 | ₹50,000 | ₹60,000 |
| 10 years | ₹60,000 | ₹80,000 | ₹1,00,000 | ₹1,20,000 |
Common questions
What is the simple interest formula?
Interest = Principal × Rate × Time ÷ 100, with the rate per year and the time in years.
How do I find the time if I know the interest?
Rearrange it: Time = Interest × 100 ÷ (Principal × Rate).
How do I enter months?
Divide by 12. Eight months is 0.67 years; use 0.6667 for accuracy.
When is simple interest used?
Some personal loans, bonds and exam questions. Bank deposits and most loans compound.