Simple Interest Calculator
Work out simple interest, or find the principal, rate or time, with rates per year, month or day and time between two dates.
Rate quoted "per 100 a month"
This is how informal lending (moneylenders, friends and family, gold loans) is often quoted in India and South Asia, such as "2 rupees per hundred".
Deposits and withdrawals (optional)
Uses the start date above. Each stretch earns interest only on the balance at the time; interest is never added to the balance.
Interest year by year
How your interest is worked out
Simple interest is only ever charged on the starting amount, so it is the same every year.
- 1
Rate a year
8% a year
= 0.08 - 2
Time in years
5 years
= 5 - 3
Interest = P × r × t
₹10,000 × 0.08
× 5
= ₹4,000 - 4
Total to get back
₹10,000
+ ₹4,000
= ₹14,000
Read more: the formula, a worked example, day-count rules and flat-rate loans
Simple interest is worked out on the principal alone. The interest is not added back to earn more interest, so you get the same amount every year and the total grows in a straight line. It is used for many short-term loans, car and personal loans quoted at a flat rate, some bonds and deposits that pay interest out, and informal lending. For interest on interest, use the compound interest calculator.
The formula
interest = principal × yearly rate ÷ 100 × years
total = principal + interest = principal × (1 + yearly rate ÷ 100 × years)
principal = interest ÷ (yearly rate ÷ 100 × years)
yearly rate = interest ÷ (principal × years) × 100
years = interest ÷ (principal × yearly rate ÷ 100)
between dates: years = days counted ÷ days in a year (365 or 360)
A rate per month is multiplied by 12 to make it yearly; a rate per day by 365 (or 360 with an Actual/360 or 30/360 day count). Time in months is divided by 12, and time in days by 365 (or 360).
Worked example
₹10,000 at 8% a year for 5 years. The rate as a decimal is 8 ÷ 100 = 0.08. Interest = 10,000 × 0.08 × 5 = ₹4,000, so the total is 10,000 + 4,000 = ₹14,000. That is 10,000 × 0.08 = ₹800 a year, 800 ÷ 12 = ₹66.67 a month and 800 ÷ 365 = ₹2.19 a day. Compounded yearly instead, 10,000 × 1.085 = ₹14,693.28, which is ₹693.28 more. Turned around: ₹4,000 of interest on ₹10,000 over 5 years means a rate of 4,000 ÷ (10,000 × 5) × 100 = 8%, and at 8% the time to earn ₹5,000 is 5,000 ÷ (10,000 × 0.08) = 6.25 years (6 years 3 months).
Day-count rules for two dates
When interest runs between two dates, the days are turned into a fraction of a year. Different lenders use different rules, so the same dates can give slightly different interest. Example: ₹50,000 at 10% from 15 January to 15 July 2026.
| Day count | How it counts | Days ÷ year | Interest |
|---|---|---|---|
| Actual/365 | Real days ÷ 365. Common for savings, fixed deposits and loans in India, the UK and many other countries. | 181 ÷ 365 | ₹2,479.45 |
| Actual/360 | Real days ÷ 360. Common for US and euro money-market loans; it charges a little more. | 181 ÷ 360 | ₹2,513.89 |
| Actual/actual | Real days, split by calendar year: ÷ 366 for days in a leap year, ÷ 365 otherwise. Used for many government bonds. | 181 ÷ 365 | ₹2,479.45 |
| 30/360 | Every month counts as 30 days and a year as 360 (US bond rule: a 31st counts as the 30th). Common for corporate bonds and mortgages. | 180 ÷ 360 | ₹2,500.00 |
"Per 100 a month" rates
Informal loans in India and South Asia are often quoted as rupees per hundred per month. ₹2 per ₹100 a month is 2% a month, or 2 × 12 = 24% a year; ₹1.5 per ₹100 is 18% a year and ₹3 per ₹100 is 36% a year. On ₹50,000 for 6 months at ₹2 per ₹100, the interest is 50,000 × 0.02 × 6 = ₹6,000.
Flat rate vs reducing balance
Some car, two-wheeler and personal loans quote a flat rate: simple interest on the full loan for the whole term, even though you repay part of it every month. ₹1,00,000 at 8% flat for 5 years costs 1,00,000 × 0.08 × 5 = ₹40,000, so each of the 60 instalments is 1,40,000 ÷ 60 = ₹2,333.33. A normal reducing-balance loan with the same instalment would have a rate of about 14.13% a year (found by trying rates until 60 payments of ₹2,333.33 are worth exactly ₹1,00,000 today). At a true 8% on a reducing balance, the instalment would be ₹2,027.64 and the interest only ₹21,658.37.
Deposits and withdrawals
With money added or taken out on dates, each stretch between two dates earns simple interest on the balance during that stretch: balance × rate × days ÷ 365 (or your day count). Example: ₹10,000 at 10% from 1 Jan 2026 to 1 Jan 2027, with ₹5,000 added on 1 July and ₹2,000 taken out on 1 October: 10,000 for 181 days, 15,000 for 92 days and 13,000 for 92 days earn ₹1,201.64 in all.
Rates are taken as fixed. Amounts are rounded for display only. Tax on interest, fees and penalties are not included. Lenders may round each month's interest or count days differently; check the loan or deposit terms.
Common questions
What is the simple interest formula?
Simple interest = principal × rate × time ÷ 100, with the rate as a yearly percentage and the time in years. The total you get back (or owe) is the principal plus that interest. For example, 10,000 at 8% a year for 5 years earns 10,000 × 8 × 5 ÷ 100 = 4,000, so the total is 14,000.
How do I work out simple interest per month?
Divide the yearly interest by 12: principal × yearly rate ÷ 100 ÷ 12. On 10,000 at 8% a year that is 800 a year, or about 66.67 a month and about 2.19 a day (800 ÷ 365). If a rate is quoted per month, multiply it by 12 to get the yearly rate.
How do I calculate simple interest between two dates?
Count the days and turn them into years with a day-count rule. With Actual/365, 50,000 at 10% from 15 January to 15 July 2026 (181 days) earns 50,000 × 0.10 × 181 ÷ 365 = 2,479.45. Banks that use Actual/360 would charge 2,513.89 for the same dates, and 30/360 counts 180 days, giving 2,500.
What does "2 per 100 per month" interest mean?
It is how informal loans are often quoted in India and South Asia: 2 rupees of interest for every 100 rupees, every month. That is 2% a month, which is 2 × 12 = 24% a year in simple interest. On 50,000 for 6 months it comes to 50,000 × 2% × 6 = 6,000.
What is the difference between simple and compound interest?
Simple interest is charged only on the starting amount, so it is the same every year. Compound interest is also charged on interest already added. 10,000 at 8% for 5 years earns 4,000 simple interest, but 4,693.28 if compounded yearly, so compounding pays 693.28 more.
Why is a flat interest rate on a loan misleading?
A flat rate charges interest on the full loan for the whole term, even though you repay part of it every month. 100,000 at 8% flat for 5 years costs 40,000 in interest, an instalment of 2,333.33. The same instalment on a normal reducing-balance loan means a rate of about 14.13% a year.
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