Simple calculator
Get a clean read on simple interest.
Calculate principal, rate, and time outcomes for straightforward lending, deposits, or comparison checks.
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Simple Interest Calculator
Results
Principal Amount:
₹1,00,000
Interest Earned:
₹0
Maturity Amount:
₹0
How the simple interest calculation works
SI = P × R × T / 100 — principal times annual rate times years. Interest accrues only on the original principal, never on previously earned interest, which is what separates it from compounding.
Worked example
Lending ₹2,00,000 to a relative chit or bond paying 7% simple interest for 5 years:
| Principal | ₹2,00,000 |
| Rate | 7% p.a. |
| Time | 5 years |
| Interest earned | ₹70,000 |
| Total receivable | ₹2,70,000 |
Frequently asked questions
Where is simple interest actually used in India?
Short-term informal loans, some gold loans, inter-family lending, car insurance late fees, and certain bonds quote simple interest. Bank deposits and loans almost always use reducing-balance or compounded math instead.
Simple vs compound interest — how big is the gap?
On ₹2,00,000 at 7% for 5 years, simple interest pays ₹70,000 while annual compounding pays about ₹80,510. Longer horizons widen the gap dramatically because compounding earns interest on interest.
Is simple interest ever better for a borrower?
Yes. A simple-interest loan never charges interest on accumulated interest, so for identical quoted rates it is always cheaper than compounding or flat-balance alternatives. Compare effective cost, not headline rates.
How do I compare a simple-interest quote with a reducing-balance loan?
Convert both to an effective annual cost. A 10% flat/simple quote often equals roughly 17–18% reducing balance — use this calculator plus the EMI calculator together to see the difference.
Calculators answer questions. Your dashboard answers all of them.
TrackMyNetWorth turns these one-off calculations into a living net worth picture — every account, loan and family member in one private dashboard with daily snapshots.
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