How to use the Simple Interest Calculator
- Enter the principal amount.
- Enter the annual interest rate.
- Enter the time and choose years, months or days.
- Read the interest and the total amount payable.
Simple interest formula
SI = P × R × T ÷ 100
- P – principal
- R – rate of interest per year (%)
- T – time in years
Total amount A = P + SI. Example: 50,000 at 8% for 3 years gives SI = 50,000 × 8 × 3 ÷ 100 = 12,000, so the total is 62,000.
Where simple interest is used
Simple interest is common for short-term personal loans, some car loans, and in school and competitive-exam maths. Most savings accounts, deposits and home loans use compound interest instead — try our compound interest calculator.
Frequently asked questions
How are months and days converted?
Months are divided by 12 and days by 365 to get the time in years.
How do I find the rate if I know the interest?
Rearrange the formula: R = SI × 100 ÷ (P × T).