Simple Interest Calculator

Use I = P × r × t ÷ 100: principal times the annual rate times the number of years, divided by 100. ₹1,00,000 at 8% for 3 years gives ₹24,000 of interest — use the calculator above for any numbers.

Simple interest is calculated only on the original principal every period; compound interest is calculated on the principal plus all previously earned interest. Over multi-year periods, compound interest always produces more interest on identical principal and rate.

Almost all modern savings accounts, FDs and loans use compound (or reducing-balance) interest. Simple interest today mostly appears in specific short-term loan products, some bonds, and academic examples — always check your specific product's terms.

Yes — a flat-rate loan charges simple interest on the full original amount for the whole tenure, even as you repay principal. A 7% flat rate typically costs about the same as a 13% reducing-balance rate, so always convert before comparing loan offers.

Interest itself cannot be negative in this formula (a negative rate would imply the lender pays the borrower), but it can be zero if the rate or time period is zero — in which case the total amount simply equals the principal.