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Simple Interest Calculator

Calculators · Added 5 July 2026

Simple interest is charged only on the original principal, never on interest already earned. It is the basis of most short-term loans, many fixed deposits and almost every homework problem. Enter three values and the fourth is calculated for you.

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How to use the simple interest calculator

  1. 1Enter the principal amount.
  2. 2Enter the annual rate of interest as a percentage.
  3. 3Enter the time period and choose years, months or days.
  4. 4Read the interest earned and the total maturity value.

Examples

A fixed deposit

Input
Principal 100,000 · Rate 7.5% p.a. · Time 3 years
Result
Interest 22,500 · Maturity value 122,500

A short-term loan in days

Input
Principal 50,000 · Rate 12% p.a. · Time 90 days
Result
Interest 1,479.45 · Total repayable 51,479.45

About the simple interest calculator

The flat-rate trap

If a lender quotes 6% 'flat' on a three-year loan, they usually mean 6% of the original principal every year, regardless of how much you have repaid. Borrow 300,000 and you pay 18,000 in interest per year, or 54,000 in total — even though your average outstanding balance over those three years is closer to 150,000.

Expressed as a reducing-balance rate, that 6% flat is roughly 11% effective. Whenever a rate looks unusually low, ask whether it is flat or reducing, and compare offers using the EMI calculator on this site instead of the headline number.

Time conventions matter

For sub-year periods, the day-count convention changes the answer. Most retail lending uses actual days over 365. Money markets often use 360-day years, which produces slightly more interest for the lender over the same calendar period.

This calculator uses 365 days per year and 30-day equivalents for months. For a contract of any size, confirm which convention the paperwork specifies before reconciling figures.

Frequently asked questions

What is the simple interest formula?
SI = P × R × T ÷ 100, where P is the principal, R is the annual rate as a percentage and T is the time in years. The maturity value is P + SI. Periods given in months or days are converted to years first — months ÷ 12, days ÷ 365.
How does it differ from compound interest?
Simple interest is always calculated on the original principal, so the amount earned each year is identical. Compound interest is calculated on the running balance, so each year earns slightly more than the last. Over short periods the gap is small; over decades it is enormous.
Which loans actually use simple interest?
Short-term personal loans, many car loans, most treasury bills and some student loans. Lenders sometimes advertise a low 'flat rate' that is really simple interest on the full original amount even as you pay it down — which makes the effective rate roughly double the number quoted.

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