Calculate SI for days, months, years instantly
Compound interest earns ₹11,051 more!
Simple Interest (SI) is the interest calculated only on the principal amount throughout the entire loan or investment period. Unlike compound interest, it doesn't include interest on previously earned interest, making it easier to calculate and understand.
Our calculator supports flexible time periods (days, months, years) and shows comparison with compound interest to help you make informed financial decisions. Perfect for loans, FDs, and short-term investments.
SI = Simple Interest
P = Principal Amount
R = Rate of Interest (in decimal)
T = Time Period (in years)
Example: ₹10,000 at 10% for 2 years
SI = 10,000 × 0.10 × 2 = ₹2,000
A = Total Amount
P = Principal
R = Rate (in decimal)
T = Time (in years)
Example: ₹10,000 at 10% for 2 years
A = 10,000(1 + 0.10 × 2) = ₹12,000
D = Number of days
M = Number of months
Y = Number of years
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Calculation | Only on principal amount | On principal + accumulated interest |
| Growth Pattern | Linear (constant) | Exponential (increasing) |
| Formula | SI = P × R × T | A = P(1 + R)^T |
| ₹1L at 10% for 5Y | ₹1,50,000 | ₹1,61,051 |
| ₹1L at 10% for 10Y | ₹2,00,000 | ₹2,59,374 |
| Best For | Loans (lower cost) | Investments (higher returns) |
| Common Uses | Car loans, short-term loans | FDs, mutual funds, savings |
Key Takeaway: For the same principal, rate, and time, compound interest always yields more than simple interest. The difference increases with longer time periods and higher rates.
Scenario: ₹5 lakh car loan at 9% for 5 years
Calculation: SI = 5,00,000 × 0.09 × 5 = ₹2,25,000
Total Repayment: ₹7,25,000
Scenario: ₹2 lakh FD at 7% for 1 year
Calculation: SI = 2,00,000 × 0.07 × 1 = ₹14,000
Maturity Amount: ₹2,14,000
Scenario: ₹10 lakh at 8.5% for 7 years
Calculation: SI = 10,00,000 × 0.085 × 7 = ₹5,95,000
Total Repayment: ₹15,95,000
Scenario: ₹50,000 at 12% for 90 days
Calculation: SI = (50,000 × 0.12 × 90) / 365 = ₹1,479
Total Repayment: ₹51,479
Scenario: ₹20 lakh at 8% for 10 years
Calculation: SI = 20,00,000 × 0.08 × 10 = ₹16,00,000
Total Repayment: ₹36,00,000
Scenario: ₹3 lakh at 9% monthly income
Calculation: Monthly = (3,00,000 × 0.09) / 12 = ₹2,250
Annual Interest: ₹27,000
Simple interest is interest calculated only on the principal amount throughout the loan/investment period. Formula: SI = P × R × T, where P = principal, R = rate per annum (in decimal), T = time (in years). For example, ₹10,000 at 10% for 2 years = ₹10,000 × 0.10 × 2 = ₹2,000 interest. Total amount = ₹12,000. Unlike compound interest, SI remains constant each year.
For days: SI = (P × R × D) / 365, where D = number of days. For months: SI = (P × R × M) / 12, where M = number of months. Example: ₹50,000 at 8% for 90 days = (50,000 × 0.08 × 90) / 365 = ₹986.30. For 6 months = (50,000 × 0.08 × 6) / 12 = ₹2,000. Our calculator automatically handles all time units.
Simple interest is calculated only on principal amount and remains constant. Compound interest is calculated on principal + accumulated interest, growing exponentially. On ₹1 lakh at 10% for 5 years: Simple Interest = ₹50,000 (total ₹1.5L), Compound Interest = ₹61,051 (total ₹1.61L). Difference of ₹11,051! CI is better for investments, SI is better for loans.
Simple interest is used in: Car loans, Short-term personal loans, Some fixed deposits, Monthly income schemes, Government bonds, Simple savings accounts, Bridge loans, Payday loans. Banks often use SI for short-term loans (< 1 year) and loans where principal is regularly paid down. Most long-term loans and investments use compound interest.
Rearrange the SI formula: P = SI / (R × T). If you need ₹20,000 interest at 8% in 5 years: P = 20,000 / (0.08 × 5) = 20,000 / 0.4 = ₹50,000. Similarly, for rate: R = SI / (P × T), and for time: T = SI / (P × R). Our calculator can compute any variable when others are known.
Good rates vary by loan type: Personal loans (10-15%), Car loans (8-12%), Gold loans (7-12%), Education loans (9-14%). For fixed deposits (6-7.5%). Lower rates are better for borrowers, higher for investors. Always compare with market rates and consider processing fees. Simple interest loans often have slightly lower rates than compound interest loans for the same tenure.