Simple Interest Calculator
Calculate simple interest where interest is only earned on the principal amount. Understand the basic interest calculation method used in some loans and deposits.
Investment Details
Simple Interest
Maturity Amount
₹1.40L
in 5 years
₹1.00L
71.4%
+₹40.0K
28.6% gain
Interest Earned
40.0%
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All You Need to Know About Simple Interest Calculator
What is a Simple Interest Calculator?
A Simple Interest Calculator is a financial tool that calculates interest earned on a principal amount where interest is not compounded. Unlike compound interest, simple interest is calculated only on the original principal, making it straightforward to understand and calculate.
Why it matters: Simple interest is commonly used for short-term loans, car loans, and some savings accounts. Understanding simple interest helps you compare different financial products and make informed decisions about borrowing or investing.
How Can RuDo's Simple Interest Calculator Help You?
Our Simple Interest Calculator provides quick and accurate calculations for any principal, rate, and time period.
Key Benefits:
- Quick Calculations: Get instant results for any combination of principal, rate, and time
- Loan Planning: Understand the total interest on short-term or flat-rate loans
- Compare Products: Evaluate different financial products that use simple interest
- Educational Tool: Learn the difference between simple and compound interest
- Multi-Currency Support: Calculate in INR, USD, or AED for global convenience
How Does the Simple Interest Calculator Work?
The Simple Interest Calculator uses the basic interest formula:
Formula:
Simple Interest (SI) = P × R × T / 100
Where:
- P = Principal amount
- R = Rate of interest per annum
- T = Time period in years
Total Amount = Principal + Simple Interest
A = P + SI = P × (1 + RT/100)
Example:
Principal: ₹1,00,000
Interest Rate: 8% per annum
Time: 3 years
Simple Interest = ₹1,00,000 × 8 × 3 / 100 = ₹24,000
Total Amount = ₹1,00,000 + ₹24,000 = ₹1,24,000
Note: With compound interest, the same investment would yield ₹1,25,971, showing the difference between simple and compound interest.
How to Use RuDo's Simple Interest Calculator?
Using our Simple Interest Calculator is extremely easy:
Step 1: Enter Principal Amount
Input the initial amount on which you want to calculate interest.
Step 2: Set Interest Rate
Enter the annual interest rate as a percentage.
Step 3: Choose Time Period
Select the investment or loan duration in years.
Step 4: View Results
Instantly see the simple interest earned and total maturity amount.
Step 5: Compare with Compound Interest
Use our other calculators to compare simple vs compound interest returns.
Advantages of Using a Simple Interest Calculator
1. Easy Understanding
Simple interest is straightforward - interest is calculated only on the principal.
2. Predictable Returns
Know exactly how much interest you'll earn without complex calculations.
3. Loan Transparency
Understand the true cost of flat-rate loans that use simple interest.
4. Short-Term Planning
Ideal for calculating returns on short-term deposits or loans.
5. Comparison Tool
Compare simple interest products with compound interest alternatives.
6. Educational Value
Understand the fundamental concept of interest calculation.
7. Quick Estimates
Get ballpark figures quickly for financial planning.
8. Borrower's Perspective
For borrowers, simple interest loans may be cheaper than reducing balance loans for short tenures.