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Simple Interest Calculator: SI Formula With Solved Examples
Find any one of interest, principal, rate or time from the other three, with each step of the working shown. Enter the rate per year or per month and the time in years, months, days or between two dates, and see the interest per day, month and year.
- Solves for interest, principal, rate or time
- Rate per year or per month; days and dates
- Interest per day, month and year, with the working
Simple interest calculator
What do you want to find?
Rate quoted per
Simple interest year by yearShow
| Year | Interest this year | Total interest | Balance (P + SI) |
|---|---|---|---|
| 1 | ₹4,000.00 | ₹4,000.00 | ₹54,000.00 |
| 2 | ₹4,000.00 | ₹8,000.00 | ₹58,000.00 |
| 3 | ₹4,000.00 | ₹12,000.00 | ₹62,000.00 |
Simple Interest Formula
SI = P × R × T ÷ 100
| Symbol | Meaning |
|---|---|
| SI | Simple interest |
| P | Principal: the amount lent, borrowed or deposited |
| R | Rate of interest per year, in percent |
| T | Time in years |
| A | Amount at the end = P + SI = P × (1 + R × T ÷ 100) |
Rearranged, the same formula finds any missing value:
| To find | Use |
|---|---|
| Interest | SI = P × R × T ÷ 100 |
| Principal | P = 100 × SI ÷ (R × T) |
| Rate | R = 100 × SI ÷ (P × T) |
| Time | T = 100 × SI ÷ (P × R) |
Solved Simple Interest Problems
1. Find the interest. ₹50,000 is lent at 8% a year for 3 years. SI = 50,000 × 8 × 3 ÷ 100 = ₹12,000. Amount = 50,000 + 12,000 = ₹62,000.
2. Find the principal. A deposit earns ₹4,500 of simple interest at 7.5% a year in 3 years. How much was deposited? P = 100 × 4,500 ÷ (7.5 × 3) = 4,50,000 ÷ 22.5 = ₹20,000.
3. Find the rate. ₹20,000 earns ₹3,600 of interest in 2 years. R = 100 × 3,600 ÷ (20,000 × 2) = 3,60,000 ÷ 40,000 = 9% a year.
4. Find the time. How long does ₹15,000 take to earn ₹1,800 at 6% a year? T = 100 × 1,800 ÷ (15,000 × 6) = 1,80,000 ÷ 90,000 = 2 years.
5. Time in months. ₹20,000 at 9% a year for 8 months. T = 8 ÷ 12 years, so SI = 20,000 × 9 × 8 ÷ 1,200 = ₹1,200.
6. Time in days. ₹1,00,000 at 9% a year for 90 days. SI = 1,00,000 × 9 × 90 ÷ 36,500 = ₹2,219.18. On a 360-day year it is 1,00,000 × 9 × 90 ÷ 36,000 = ₹2,250.
7. Rate per month. ₹1,00,000 at 2% a month for 6 months. R = 2 × 12 = 24% a year, T = 0.5, so SI = 1,00,000 × 24 × 0.5 ÷ 100 = ₹12,000.
Every one of these can be checked in the calculator: choose what to find, enter the other three values, and compare the working it shows.
Interest per Year, Month and Day
Simple interest builds up at the same speed throughout the loan or deposit. For ₹50,000 at 8% a year:
| Period | Interest |
|---|---|
| Per year | ₹4,000.00 |
| Per month | ₹333.33 |
| Per day (÷ 365) | ₹10.96 |
That steady rate is why lenders can quote a daily interest figure for paying a loan off early: the interest so far is the daily amount times the days that have passed.
Common Mistakes With the Formula
- Time not in years. T must be in years when R is a yearly rate. 8 months is 8 ÷ 12, not 8.
- A monthly rate used as a yearly rate. 2% a month is 24% a year. Mixing them up understates the interest twelve times.
- Percent entered as a decimal, or both. The ÷ 100 in the formula already converts the percent. Use R = 8, not 0.08, with this version of the formula.
- Interest confused with the amount. SI is only the interest. The amount A = P + SI is what is repaid or received at the end.
- Counting both the first and last day. Between two dates, count the start day but not the end day: 1 March to 30 May is 90 days.
Simple Interest vs Compound Interest
Simple interest is earned only on the principal. Compound interest is also earned on interest already added. For ₹50,000 at 8% a year, with yearly compounding:
| Years | Simple interest | Compound interest | Difference |
|---|---|---|---|
| 1 | ₹4,000.00 | ₹4,000.00 | ₹0.00 |
| 3 | ₹12,000.00 | ₹12,985.60 | ₹985.60 |
| 5 | ₹20,000.00 | ₹23,466.40 | ₹3,466.40 |
| 10 | ₹40,000.00 | ₹57,946.25 | ₹17,946.25 |
| 20 | ₹80,000.00 | ₹1,83,047.86 | ₹1,03,047.86 |
The two are equal after one year. After 20 years, compound interest has earned more than twice as much. The compound interest calculator handles monthly compounding and regular deposits.
Where You Meet Simple Interest
- Flat-rate loans. Some vehicle and personal loans charge interest on the original amount for the whole term, even as it is repaid. Their real cost is far higher than the quoted rate.
- Interest calculated daily on a balance. Many car loans and short-term business loans charge each day's interest on the outstanding principal only, so paying early saves interest.
- Deposits that pay out interest. A deposit that pays its interest to you each quarter, rather than adding it to the balance, earns simple interest on the original amount.
- Money market instruments and late-payment interest, which are usually calculated per day on a fixed amount.
The calculator applies the formula exactly as written. Check your loan or deposit agreement for the day count and how often interest is charged or paid.
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Simple Interest Calculator FAQ
Formula questions students and borrowers ask most.
What is the simple interest formula?
SI = P × R × T ÷ 100, where P is the principal, R the rate per year in percent and T the time in years. The amount repaid or received at the end is A = P + SI. For ₹50,000 at 8% for 3 years, SI = 50,000 × 8 × 3 ÷ 100 = ₹12,000 and A = ₹62,000.
How do I calculate simple interest for months?
Turn the months into years by dividing by 12, then use the formula. ₹20,000 at 9% a year for 8 months: T = 8 ÷ 12, so SI = 20,000 × 9 × 8 ÷ 1,200 = ₹1,200.
How do I calculate simple interest per day?
Daily interest = P × R ÷ 100 ÷ 365. On ₹50,000 at 8% a year that is ₹10.96 a day. For a number of days, multiply by the days, or use T = days ÷ 365 in the formula. Some commercial loans divide by 360 instead, which gives slightly more interest.
My lender quotes 2% a month. What is that per year?
Multiply by 12: 2% a month is 24% a year in simple interest. On ₹1,00,000 for 6 months that is ₹12,000. Select 'Per month' under the rate to enter it directly; the working shows the conversion.
How do I find the rate of interest?
R = 100 × SI ÷ (P × T). If ₹20,000 earns ₹3,600 in 2 years, R = 360,000 ÷ 40,000 = 9% a year.
How do I find the principal or the time?
P = 100 × SI ÷ (R × T) and T = 100 × SI ÷ (P × R). ₹4,500 of interest at 7.5% over 3 years means a principal of ₹20,000. ₹1,800 of interest on ₹15,000 at 6% means 2 years.
Which is better, simple or compound interest?
At the same rate, a borrower pays less with simple interest and a saver earns more with compound interest. Over one year with yearly compounding the two are equal; after that compound interest pulls ahead, by ₹17,946 on ₹50,000 at 8% over 10 years.
Is a flat rate loan the same as simple interest?
Yes. A flat rate charges simple interest on the full original amount for the whole term, even as you repay it. It costs much more than the same reducing balance rate, so convert a flat rate before comparing it with a reducing balance offer.