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Simple Interest Calculator

Calculate interest charges on the principal sum borrowed or invested.

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Parameters

Display Currency
₹
010 Cr
%
030
Years
130

Calculation Results

Total Amount

₹1.25 L

Principal

₹1.00 L

Interest Earned

₹25,000

Total Amount₹1.25 L
Principal₹1.00 L (80%)
Interest₹25,000 (20%)

Growth Projection Over Time

Yr 0
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Total Investment
Total Interest Earned

Year-by-Year Growth Breakdown

Yearly projection of invested capital, interest earned, and total balance.

YearInvestedInterestBalance
Year 1₹1.00 L₹5,000₹1.05 L
Year 2₹1.00 L₹10,000₹1.10 L
Year 3₹1.00 L₹15,000₹1.15 L
Year 4₹1.00 L₹20,000₹1.20 L
Year 5₹1.00 L₹25,000₹1.25 L

Calculator Guide & Math

1How Simple Interest Works

Simple interest is a quick and easy method of calculating the interest charge on a loan or investment. It is determined by multiplying the daily or annual interest rate by the principal amount and by the number of days or years the loan/investment remains active.

Formula & Math Explanation

Simple Interest = Principal × Rate × Time / 100
  • •Principal = The initial sum of money borrowed or invested.
  • •Rate = The annual interest rate percentage.
  • •Time = The duration of the loan or investment in years. If the tenure is in months, divide by 12. If in days, divide by 365.

2Step-by-Step Simple Interest Example

You invest ₹1,00,000 at a simple interest rate of 8% per annum for a period of 5 years.

  1. Identify values: Principal = 1,00,000, Rate = 8%, Time = 5 years.
  2. Apply formula: Interest = 1,00,000 × 8 × 5 / 100.
  3. Calculate Interest: Interest = ₹40,000.
  4. Calculate Maturity Value: Principal + Interest = ₹1,40,000.
Result Summary: At the end of 5 years, you earn ₹40,000 in interest, bringing your total balance to ₹1,40,000.

Simple Interest FAQs

Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus any accumulated interest from previous periods.