Simple Interest Calculator
Calculate Simple Interest using SI = P × R × T formula. Also find missing values — enter any 3 to find the 4th.
When Simple Interest is Used in Financial Calculations
Simple Interest (SI) is the most basic form of interest calculation where interest is computed only on the original principal, not on accumulated interest. It is commonly used for short-term loans, vehicle loans, some personal loans, government bonds and educational loans. While compound interest is used for investments and long-term loans, simple interest is more transparent and easier to calculate for short-duration transactions.
Frequently Asked Questions
What is the simple interest formula? ▼
SI = P × R × T where P = Principal amount, R = Annual interest rate (as decimal or percentage), T = Time in years. Total Amount = P + SI.
Calculate simple interest on ₹50,000 at 10% for 3 years. ▼
SI = 50,000 × 10/100 × 3 = ₹15,000. Total amount = ₹65,000. Our simple interest calculator gives instant results for any combination of P, R and T.
Where is simple interest used in India? ▼
Simple interest is used for: short-term personal loans (less than 1 year), some vehicle loans, Kisan Credit Cards, post office savings accounts for the first year, and short-term government securities.
What is the difference between flat rate and reducing balance interest? ▼
Flat rate (simple interest) calculates interest on the full principal throughout the tenure. Reducing balance (compound) calculates on the outstanding principal after each EMI payment. Flat rate means you pay more total interest — effective rate is nearly double the stated flat rate.