Simple Interest Calculator

Calculate your simple interest.

Principal Amount


Number of years

1 yr
25 yrs

Interest Rate


What is a simple interest calculator?

Simple interest is the amount of money you make on your investment. It is also called the principal amount. For example, if you deposit or invest Rs.100 in a savings/investment option that pays simple interest at 7% per year, you will get Rs.7 every year as simple interest for the entire investment duration. At maturity, you will get back the initial investment amount, i.e. Rs.100 and interest generated at the end of the term. Calculating simple interest by hand over a long period may be tricky. A simple interest rate calculator is helpful in calculating the interest amount and accumulated amount over the required time frame. 

A simple interest calculator is a digital tool that lets you calculate the amount of simple interest without taking too much time and doing complicated calculations. It has a simple interest rate formula box already entered into the online simple interest calculator. You have to simply enter the principal amount, interest rate, and time on the simple interest calculator as per your requirements.

You can use Upstox’s simple interest calculator online. You may use the simple interest calculator to figure out how much you’ll pay/earn at the end of a loan/investment if you are borrowing/investing money and paying/making simple interest.

What is simple interest rate formula?

We may use simple interest in both investment and borrowing situations. With investment, you earn interest, but you must pay interest to the lender when you borrow money.

Let us see how simple interest would work in both of these cases. 

When you earn simple interest in your funds, the financial institution computes your interest income based on your invested amount. Here, the interest is generated only on the principal and not on the principal with interest earned previously. In case of simple interest, there is no such thing as interest on interest.

So, in the above example, your yearly interest rate is 7% and is computed on the original investment amount of Rs.100. In the coming years, it will calculate interest based on 100, rather than the interest earned the prior year, i.e. Rs.7. 

Compound interest varies from simple interest. The compound interest is computed on a larger sum each year. For example, if you invest Rs.100 and receive Rs.7 as the first year’s interest, you will collect interest on Rs.107 instead of Rs.100 next year. This makes simple interest rates different from compound interest.

A Fixed Deposit with a monthly/quarterly payout option is an example of a saving option that offers simple interest. Here, the interest is earned on the principal only as the interest gained during the quarter or month is automatically credited to your savings account.

Car and consumer loans use simple interest to figure out the EMI. If we apply the previous example as before, but this time the 100 represents the borrowed money rather than the invested amount, the interest due per year will be Rs.7. 

Simple interest formula 

Now, let us look at the simple interest formula

Here’s the simple interest rate formula

Simple Interest = (P*R*T)/100


P= Principal (the original amount invested/borrowed)

R= Interest rate (in per cent per annum)

T= Time Duration (in years)

In this simple interest formula, the annual interest rate is multiplied by the number of years and the principal amount. 

Let us see an example of simple interest formula.

Let’s assume that the principal amount is Rs 1 lakh. The annual interest rate is 9%, and the term is two years.

Now the amount of simple interest will be

Simple Interest = (1,00,000*9*2 years)/100


So, Rs.18,000 is the interest amount. 

To calculate the total amount that you will receive or must give at the end of two years will be 

Total amount = Principal + simple interest 

1,00,000+18,000 = 1,18,000

This helps to understand the amount received/paid at the end of the maturity period. 

Future Value Calculation 

The above simple interest formula helps you figure out the interest amount on the principal. 

There is another formula that can show you the future amount. 

To get the future amount with simple interest, we will need the principal, an interest rate and the time duration. 

Here’s the formula: 

FV= P(1+RT)


FV= Future Value

P = Principal

R = interest rate expressed as a decimal 

T = number of time periods    

Let’s calculate the future value with the simple interest formula example that we mentioned above: 

FV = 1,00,000 (1+0.09*2) = Rs 1,18,000.

We can see that the future value is the same for both calculators.

How does a simple interest calculator work?

A simple interest calculator uses the formula that we have seen in the earlier paragraphs as part of its code. You enter all the variables for a specific loan or investment, and the calculator calculates the total interest you will earn or pay, depending on the information you provide.

Imagine you wish to use a simple interest rate calculator online to compute simple interest on your investment or loan. You can enter the principal amount (Rs.1 lakh), annual interest rate (7%) and five years. 

Assuming that you have withdrawn no principal over the five years, the calculator will compute interest on the whole principal for the five years at 7% and calculate the interest as Rs.35,000 (i.e., Rs.1,000,000 x 7% x 5 years).

How to use Upstox’s Simple interest calculator

The Upstox’s simple interest calculator is simple to use online. In order to use the Upstox Simple interest rate calculator, you need to input three things:

1. The principal amount, i.e., the invested or borrowed amount
2. The simple interest rate
3. The time you will keep the money you have put in or the time the loan’s principal will be due

After adding these values and hitting the calculate button, the online simple interest calculator will use the simple interest rate formula to calculate the interest amount and the total amount within seconds. You will get the actual interest you will get/pay throughout the period.

What is the difference between the CI and SI calculator?

In an earlier paragraph, you have seen that we calculate the interest on the principal amount in simple interest. However, the interest on interest is calculated to get the final amount with compound interest. So, in the case of compound interest, the principal on which you calculate the interest increases every year.

Whether you earn simple or compound interest, it affects the overall amount of interest that you will accumulate. However, most investment options offer compound interest that allows you to receive interest on previous periods’ interest.

Let’s understand the differences between simple interest and compound interest with the help of this table:

Differentiating Point  Simple Interest Compound Interest
Definition Simple interest is calculated only on the principal amount of a loan, not on any interest from the previous loan period or deposit. Compound interest is paid not only on the principal but also on the accumulated interest from the previous periods.
Interest paid  The amount is paid at the end of each period, i.e., in some cases, interest is paid at the end of each year on a regular basis. Compound interest is the case where interest is not paid at the end of every period. In fact, the interest earned is added to the principal amount. At maturity or redemption, the initial principal amount along with the accumulated interest is paid back to the individual.
Interest Charged Interest is paid on the principal only. Interest is paid on the principal and accumulated interest as well. 
Principal Amount The principal amount is constant. The principal amount varies during the entire tenure. 
Formula SI = (P*R*T)/100


P= Principal

R= Interest rate 

T= Time Duration 

CI= [P x (1+R) N] – P


P= Principal 

R= Interest rate 

T= Time Duration

While in the short term, the difference in return between simple and compound rates of interest is negligible. Over the longer-term, compound interest offers remarkably better returns.

Benefits of a simple interest calculator

The simple interest calculation helps the borrower and lender make informed and calculated financial decisions. Following are the benefits of using a simple interest calculator:

How Upstox is one of the best online Simple interest calculators?

Following are the benefits of using Upstox’s simple interest calculator:

Frequently Asked Questions

How does a simple interest calculator work?

You need to put the investment amount as the principal amount, your expected rate of returns as the interest rate and your suitable period for which you will invest your money or loan period as the time. 

By entering the needed details, you will get the interest amount you will receive or pay on the principal amount. The online simple interest calculator provides accurate results, free from any errors. 

How do you calculate EMI in a simple interest loan calculator?

The simple interest loan EMI calculator uses the simple interest EMI formula to calculate the EMI. 

Let us consider an example where the principal is Rs. 1,00,000, the interest rate is 9%, and the time is five years.  

Interest = (100000*9*5)/100

Interest = Rs.45,000

Total amount = Rs.1,45,000

EMI amount = Rs.1,45,000/12 = Rs.12083.3 per month

What is the Principal amount in SI calculators?

The principal amount is the money that we have invested initially or borrowed. Let us take an example regarding investment.  

You have received a Diwali bonus from the company of Rs 50,000, and you have invested that bonus in FD for one year at an interest rate of 5% p.a. After one year, your 50,000 becomes Rs 52,500. In such a case, the principal amount will be the amount you have invested originally, i.e., 50,000, and the interest amount will be Rs 2,500.

What is the rate of interest in simple interest calculators?

We can say that the interest rate is the cost of borrowing the loan or the return on the investment option that uses simple interest. For example, the interest rate offered on a fixed deposit with quarterly/monthly withdrawal is 5%, then 5% is the simple interest you need to use when calculating simple interest. 

However, with car loans that use simple interest, the annual interest of, say, 9% is the rate of interest that you need to use when calculating simple interest on the simple interest calculator.

This calculator is meant to be used for indicative purposes only. It is designed to assist you in determining the appropriate amount of prospective investments. This calculator alone is not sufficient and shouldn’t be used for the development or implementation of any investment strategy. Upstox does not take the responsibility/liability nor does it undertake the authenticity of the figures calculated therein. Upstox makes no warranty about the accuracy of the calculators/reckoners. The examples do not claim to represent the performance of any security or investments. In view of the individual nature of tax consequences, each investor is advised to consult his/her own professional tax advisor before making any investment decisions on the basis of the results provided through the use of this calculator.