Simple Interest Calculator
Calculate simple interest on principal amount and compare with compound interest
Simple Interest Details
Simple Interest Results
Enter details and click Calculate to see simple interest results
Understanding Simple Interest
Key Concepts
Simple Formula
SI = P × R × T / 100
Principal
Initial amount invested
Linear Growth
Interest remains constant
Time Factor
Directly proportional
Simple Interest Features
- ✓Easy to calculate and understand
- ✓Interest calculated only on principal
- ✓Linear growth over time
- ✓Predictable returns
- ✓Common in short-term loans
When It's Used
- 💡Personal Loans: Short-term borrowing
- 💡Car Loans: Some auto financing
- 💡Bonds: Government and corporate bonds
- 💡Savings: Basic savings accounts
- 💡Certificates: Some fixed deposits
Simple vs Compound Interest
Simple Interest
• Interest on principal only
• Linear growth pattern
• Same interest each year
• Lower total returns
Compound Interest
• Interest on principal + interest
• Exponential growth pattern
• Increasing interest each year
• Higher total returns
Example: ₹1,00,000 at 10% for 5 years
| Year | Simple Interest | Compound Interest | Difference |
|---|---|---|---|
| 1 | ₹10,000 | ₹10,000 | ₹0 |
| 2 | ₹20,000 | ₹21,000 | ₹1,000 |
| 3 | ₹30,000 | ₹33,100 | ₹3,100 |
| 4 | ₹40,000 | ₹46,410 | ₹6,410 |
| 5 | ₹50,000 | ₹61,051 | ₹11,051 |
Compound interest earns 22% more over 5 years
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