Simple Interest Calculator.

Simple interest = P × R × T ÷ 100, where P is the principal, R is the annual interest rate (percent), and T is the time in years. The total amount you repay or receive is P + interest. Unlike compound interest, simple interest is charged only on the original principal, never on accumulated interest.

Convert the time to years first. For months, divide by 12 (e.g. 6 months = 0.5 years). For days, divide by 365. This calculator does it automatically. Just pick the Years, Months, or Days unit. Example: ₹50,000 at 10% for 9 months = 50,000 × 10 × (9/12) ÷ 100 = ₹3,750.

Simple interest is calculated only on the principal, so it grows in a straight line. Compound interest is calculated on the principal plus previously earned interest, so it accelerates over time. Over long periods the gap is huge: on ₹1,00,000 at 8% for 20 years, simple interest yields ₹1,60,000 while annual compounding yields ₹3,66,000. Short-term loans and many car/personal loans use simple interest; savings and investments usually compound.

Simple interest is common on short-term personal loans, many auto loans, some certificates of deposit, treasury bills, and informal lending. In India, gold loans and many NBFC short-tenure loans quote flat/simple interest. Always check whether a lender quotes simple (flat) or reducing-balance interest. The effective cost differs a lot.

Roughly, yes. A flat-rate loan charges interest on the full original principal for the entire tenure, which is simple interest. It looks cheaper than a reducing-balance (EMI) rate but is actually more expensive, because you keep paying interest on money you have already repaid. A 10% flat rate can equal ~18% reducing-balance. Use our EMI calculator to compare.