Simple interest formula

Interest = (P × R × T) / 100, where P is principal, R the annual rate and T the time in years. Total amount = P + Interest.

Simple vs compound interest

• Simple interest — calculated only on the original principal; common for short-term loans and some deposits.
• Compound interest — calculated on principal + accumulated interest; grows faster over long periods.

Frequently asked questions

When is simple interest used? Short-term personal loans, auto loans in some countries, and quick mental estimates.
How is it different from the FD calculator? Bank FDs compound quarterly; this tool is for pure simple-interest scenarios.
Can time be in months? Convert months to years (e.g. 6 months = 0.5 years) before entering.