Multiply by 12 for simple interest. 1.5% per month is 18% a year.
Simple Interest Calculator
Quick P × R × T ÷ 100 with the rate entered per month or per year. Get the interest, the total amount to repay or receive, and a side-by-side with compound interest so the difference is obvious.
Principal
₹1,00,000
Simple interest
₹50,000
Total amount
₹1,50,000
Annual rate used
10.00%
Compound interest would be
₹61,051
Simple vs compound, year by year
| Year | Simple interest | Compound interest | Difference |
|---|---|---|---|
| 1 | ₹10,000 | ₹10,000 | ₹0 |
| 2 | ₹20,000 | ₹21,000 | ₹1,000 |
| 3 | ₹30,000 | ₹33,100 | ₹3,100 |
| 4 | ₹40,000 | ₹46,410 | ₹6,410 |
| 5 | ₹50,000 | ₹61,051 | ₹11,051 |
How the Simple Interest Calculator works
Simple interest charges (or pays) a fixed percentage of the original principal for every period. Informal loans, some gold loans and many short-term borrowings quote a monthly rate — 2% a month is 24% a year.
The compound comparison uses the same annual rate compounded yearly, which is what a bank FD or a loan with capitalised interest would do.
SI = P × R × T ÷ 100 Total = P + SI
- P
- principal
- R
- annual rate (monthly rate × 12)
- T
- years
Worked example
- Principal amount: ₹1,00,000
- Rate is per: Year
- Interest rate: 10%
- Time period: 5 Yr
₹1 lakh at 10% simple interest for 5 years earns ₹50,000, total ₹1.5 lakh. Compounded yearly at the same rate the interest would be ₹61,051 — the ₹11,051 gap widens every year.