Simple Interest Calculator
Calculate simple interest with SI = P×R×T/100. Get total amount, a monthly breakdown table and a comparison against compound interest.
About the Simple Interest Calculator
Simple interest is interest calculated only on the original principal — it never compounds. This calculator applies the classic formula SI = P × R × T ÷ 100, where P is the principal, R the annual rate in percent, and T the time in years (you can also enter months and the tool converts automatically). You instantly see the interest earned, the total amount, and a month-by-month accrual table.
For example, 50,000 at 8% per year for 3 years earns 50,000 × 8 × 3 ÷ 100 = 12,000 of interest, for a total of 62,000. Because the interest base never grows, simple interest accrues in a straight line — the table shows the same amount added every month. The calculator also tells you how much more annual compounding would have earned over the same period, so you can see the difference at a glance.
Simple interest is still how many real products work: committee/BC-style informal lending, many personal and gold loans in Pakistan and India, car loans in some markets, short-term business borrowing between traders, and bonds' coupon payments. Students also meet it as a staple of school math and banking exams.
How to Use the Simple Interest Calculator
- 1Enter the principal amount.
- 2Enter the annual interest rate in percent.
- 3Enter the time period and choose years or months.
- 4Read the interest, total amount, monthly table and the compound-interest comparison.
Frequently Asked Questions
How do I calculate simple interest with an example?
Use SI = P × R × T ÷ 100. For 50,000 borrowed at 8% per year for 3 years: 50,000 × 8 × 3 ÷ 100 = 12,000 interest, so you repay 62,000 in total. If the time is in months, divide by 12 first — 18 months is T = 1.5.
What is the difference between simple and compound interest?
Simple interest is charged only on the principal; compound interest is charged on principal plus accumulated interest. At 8% for 3 years on 50,000, simple interest gives 12,000, while annual compounding gives 12,986 — and the gap widens dramatically over longer periods. This calculator shows the difference for your exact numbers.
How do I calculate simple interest for months instead of years?
Convert months to years by dividing by 12. For 25,000 at 12% for 9 months: T = 9 ÷ 12 = 0.75, so SI = 25,000 × 12 × 0.75 ÷ 100 = 2,250. In this calculator just switch the time unit to months and enter 9.
How do I find the rate or principal from a simple interest amount?
Rearrange the formula. Rate R = 100 × SI ÷ (P × T): if 40,000 earned 6,000 in 2 years, R = 100 × 6,000 ÷ 80,000 = 7.5%. Principal P = 100 × SI ÷ (R × T) works the same way. You can also just try values in the calculator until the interest matches.
Where is simple interest actually used today?
Gold loans and many personal loans in South Asia, informal lending, some car loans, short-term trade credit, bond coupons and penalty interest on late payments all commonly use simple interest. Savings accounts and long-term investments almost always compound instead — which is why they grow faster.