Simple Interest Calculator
Simple interest is calculated once on the original principal, unlike compound interest. See the formula and how much that difference actually matters.
Your numbers
₹
%/yr
years
Result — with the workings shown
Simple interest
₹24,000
Total amount
₹1,24,000
How this is worked out
Simple interest is calculated only on the original principal, every year, with no compounding: ₹1,00,000 × 8.0% × 3 yrs ÷ 100 = ₹24,000 interest, for a total of ₹1,24,000.
81%
19%
Principal · ₹1,00,000Interest · ₹24,000
The same ₹1,00,000 at 8.0%/yr compounding annually over 3 years would instead reach ₹1,25,971 — ₹1,971 more — because compound interest earns interest on the interest already added. Try the Compound Interest & SIP calculator to see that difference worked out in full.
Where you'll actually see simple interest: short-term personal loans, some car loans, penalty interest on late payments, and math-class problems. Most long-term products you'd invest in — FDs, SIPs, PPF — use compound interest instead, which is why the gap above matters.
Terms used on this page
- Principal
- The original amount lent or invested, before any interest is added.
- Simple interest
- Interest calculated only on the principal, every period — it never compounds, so it grows in a straight line, not a curve.