About interest calculator
Simple interest is calculated only on the original amount, not on interest earned earlier.
Formula
Interest = P × R × T ÷ 100, where T is in years. ₹50,000 at 8% for 3 years earns ₹12,000, and the total is ₹62,000.
Simple or compound
Many savings products use compound interest, which grows faster over time. Use the Compound Interest Calculator for those.
A worked example
On ₹80,000 at 7.5 percent simple interest for 2½ years, the interest is 80,000 × 7.5 × 2.5 ÷ 100 = ₹15,000, and the total amount is ₹95,000. If the same sum were compounded yearly it would earn a little more, about ₹15,850.
Where simple interest is used
Some personal loans, informal lending and certain short-term products quote simple interest. Always ask whether a rate is simple or compound, and per year or per month.
