Simple Interest Calculator
Calculate simple interest on any principal amount. See year-wise interest breakdown with the SI formula.
Year-wise Breakdown
| Year | Interest | Total |
|---|---|---|
| Year 1 | ₹8,000 | ₹1,08,000 |
| Year 2 | ₹16,000 | ₹1,16,000 |
| Year 3 | ₹24,000 | ₹1,24,000 |
| Year 4 | ₹32,000 | ₹1,32,000 |
| Year 5 | ₹40,000 | ₹1,40,000 |
Frequently Asked Questions
What is simple interest?
Simple interest is calculated only on the original principal amount. Formula: SI = P × R × T / 100, where P is principal, R is annual rate, T is time in years.
Where is simple interest used?
Simple interest is used in short-term loans, car loans, some personal loans, and savings account interest calculations. It's simpler but yields less than compound interest over long periods.
How is it different from compound interest?
Simple interest is calculated only on the principal. Compound interest is on principal + accumulated interest. For 1 year, both give the same result. The gap widens significantly over longer periods.
What is the formula for total amount?
Total Amount = Principal + Simple Interest = P + (P × R × T / 100) = P × (1 + R × T / 100).
Is simple interest better for borrowers?
Yes! As a borrower, you pay less with simple interest since interest doesn't compound. As an investor, compound interest is better because your earnings grow faster.