Simple Interest CalculatorFree
Calculate the interest earned or charged when the rate applies only to the original principal. Change any input to see the maturity amount and the straight-line growth path instantly.
Highlights
- Instant principal, interest and maturity-value breakdown.
- Supports fractional years and decimal interest rates.
- Year-by-year graph makes linear growth easy to compare.
- Uses the standard P × R × T simple-interest formula.
Formula used
Interest = Principal × Rate × Time
No interest-on-interest is applied.
Everything is calculated in your browser. Nothing you enter is sent to a server or stored.
Maturity amount
₹1.38 L
₹1,37,500
Principal
₹1.00 L
Interest earned
₹37.5K
7.5% × 5 years
Simple interest growth
Principal stays constant while interest rises by the same amount each year.
How to calculate simple interest
Multiply the principal by the annual rate expressed as a decimal, then multiply by the number of years. On ₹1,00,000 at 7.5% for five years, the interest is ₹37,500 and the maturity amount is ₹1,37,500.
Simple interest grows in a straight line because every year's interest is calculated from the same opening principal. That makes it useful for quick estimates and products that explicitly quote a flat or simple rate.
Simple interest versus compound interest
Compound interest earns a return on earlier interest, so its curve accelerates over time. Simple interest does not. Two products showing the same headline rate can therefore produce very different maturity values when one compounds and the other does not.
Methodology
- Annual rate is divided by 100 and multiplied by the principal and time in years.
- Maturity amount equals principal plus the calculated simple interest.
- The chart keeps principal constant and adds an equal amount of interest for every full year.
Scope and assumptions
- The annual interest rate remains unchanged for the full period.
- There are no deposits, withdrawals, fees, taxes or penalties.
- Use compound interest instead if earned interest is added back to the balance.
FAQ
What is the formula for simple interest?
Simple interest is P × R × T, where P is principal, R is the annual interest rate as a decimal, and T is time in years. The maturity amount is principal plus interest.
How much interest will ₹1 lakh earn at 8% for 5 years?
Using simple interest, ₹1,00,000 × 8% × 5 equals ₹40,000 of interest. The maturity amount is ₹1,40,000.
Does simple interest compound monthly?
No. Simple interest is always calculated on the original principal. If interest is added to the balance and earns more interest, use the compound interest calculator.
Can I enter months instead of years?
Convert months to years by dividing by 12. For example, 18 months is 1.5 years, which this calculator accepts.
Is simple interest the same as a flat loan rate?
They are similar in that interest is based on the original principal, but lender disclosures and fee treatment can differ. Compare a loan using its reducing-balance EMI and annual percentage rate, not only a quoted flat rate.