Simple Interest Calculator

What is the Simple Interest Calculator?

Simple interest is charged on the original principal for the whole term. Nothing is added to the base as time passes, so the interest is the same in year one as in year ten.

It appears in short-term personal lending, some vehicle loans, and most school-level maths problems. Most real savings and long-term borrowing use compound interest instead.

How to use the Simple Interest Calculator

1. Enter the principal amount.
2. Enter the annual interest rate as a percentage.
3. Enter the time period in years — use decimals for part-years, so six months is 0.5.

Formula

Because the rate is entered as a percentage rather than a decimal, the formula divides by 100 at the end. If you prefer to work in decimals, use P × r × T with r = R ÷ 100 and drop the division.

How the calculation works

Multiply the principal by the rate to get one year of interest, then multiply by the number of years. Since the base never changes, the total is exactly proportional to time — doubling the term doubles the interest.

Worked example

₹50,000 at 7% per year for 3 years:

• P × R × T = 50000 × 7 × 3 = 10,50,000
• ÷ 100 = ₹10,500 interest
• Total repayable = 50,000 + 10,500 = ₹60,500

Uses and benefits

• Check the interest on a short-term personal loan.
• Verify a lender's figure when they quote simple rather than reducing-balance interest.
• Work through textbook problems and check your answer.