Simple Interest Calculator — SI Calculator for Years/Months/Days
Calculate simple interest for any time period — years, months, or days. See monthly and daily interest, compare with compound interest. Free simple interest calculator.
Simple Interest Calculator
Calculate SI quickly
Simple Interest Results
Simple Interest
₹40,000
Total Amount
₹1,40,000
Principal vs Interest
Simple vs Compound Interest
What is Simple Interest?
Simple Interest (SI) is interest calculated only on the original principal amount. Unlike compound interest, it does not include interest on accumulated interest. The interest earned each year remains the same.
Simple Interest Formula
SI = P × R × T / 100
Total Amount = P + SI
Where:
- P = Principal amount
- R = Rate of interest per annum
- T = Time period in years
Where Simple Interest is Used
- Car loans — Some car dealers offer flat rate (simple interest) loans
- Personal loans — Flat rate EMI calculations
- Short-term loans — Money lending, informal loans
- Government bonds — Some bonds pay simple interest
- Education — Basic interest calculations in school
Simple vs Compound Interest
For ₹1,00,000 at 10% for 5 years:
- Simple Interest: ₹50,000 (Total: ₹1,50,000)
- Compound Interest: ₹61,051 (Total: ₹1,61,051)
- Difference: ₹11,051 more with CI
The gap widens significantly over longer periods and higher rates.
Frequently Asked Questions
What is the difference between flat rate and reducing balance interest?
Flat rate (simple interest) calculates interest on the full principal for the entire loan period. Reducing balance calculates interest on the outstanding principal, which decreases as you pay EMIs. A flat rate of 10% is roughly equivalent to a reducing balance rate of 17-18%.
Do banks use simple interest?
Most banks use compound interest for savings accounts and FDs. However, some personal loans and car loans advertised as "flat rate" use simple interest. Always compare the effective annual rate (EAR) rather than the stated rate to make fair comparisons.
How to calculate simple interest for months or days?
Convert the time to years: For months, divide by 12. For days, divide by 365. Example: SI for 90 days = P × R × (90/365) / 100. Our calculator supports all three time units for convenience.
Is simple interest always less than compound interest?
Yes, for periods longer than 1 compounding cycle, compound interest is always greater than simple interest (assuming the same rate and principal). For exactly 1 year with annual compounding, they are equal. For periods less than 1 compounding cycle, SI can be slightly more.
What is the formula to find principal from simple interest?
P = (SI × 100) / (R × T). If you earned ₹10,000 interest at 8% in 2 years, the principal was: P = (10,000 × 100) / (8 × 2) = ₹62,500.
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