Simple Interest Calculator
₹1 lakh at 8% for 3 years earns ₹24,000 in simple interest. Change the amount, rate or period, or pick two dates, and the figures update as you type.
Year-by-year interest table
Months count as 1/12 of a year and days as 1/365 of a year. Everything is calculated in your browser.
The formula
Interest is charged on the original principal only, so every year earns the same amount. On ₹1 lakh at 8% that is ₹8,000 a year, about ₹666.67 a month, and ₹24,000 over three years for a total of ₹1,24,000.
Months and days
T has to be in years. Six months is 0.5. Days are divided by 365, so 90 days is 0.2466 years, and ₹2 lakh at 9% for those 90 days earns 2,00,000 × 9 × 90 ÷ 365 ÷ 100 = ₹4,438.36. Typing 6 in the years box when you meant six months gives an answer twelve times too big; it's the most common slip with this formula.
For a fixed stretch such as an overdue invoice or a delayed refund, the date option is easier. Pick 1 January 2026 and 1 April 2026 and it counts 90 days by itself.
Turning it round
You lent ₹50,000 to a cousin and got ₹56,000 back two years later. The interest was ₹6,000, so R = 6,000 × 100 ÷ (50,000 × 2), which is 6% a year.
Monthly rates from private lenders
Moneylenders, chit groups and some gold-loan shops quote interest per month: "₹1.5 per hundred per month" means 1.5% a month, which is 18% a year. On ₹50,000 for 18 months that's ₹13,500 of interest. Convert to a yearly figure before you compare it with a bank's rate, and check whether the lender adds unpaid interest to the loan, because then it is no longer simple interest.
Simple interest on ₹1 lakh
Scale these for other amounts: triple them for ₹3 lakh, halve them for ₹50,000.
| Rate a year | 1 year | 2 years | 3 years | 5 years |
|---|---|---|---|---|
| 6% | ₹6,000 | ₹12,000 | ₹18,000 | ₹30,000 |
| 7% | ₹7,000 | ₹14,000 | ₹21,000 | ₹35,000 |
| 8% | ₹8,000 | ₹16,000 | ₹24,000 | ₹40,000 |
| 9% | ₹9,000 | ₹18,000 | ₹27,000 | ₹45,000 |
| 10% | ₹10,000 | ₹20,000 | ₹30,000 | ₹50,000 |
| 12% | ₹12,000 | ₹24,000 | ₹36,000 | ₹60,000 |
How far compounding pulls ahead
For one year the two methods agree. After that, interest earned on interest opens a gap, and over long periods it gets large. ₹1 lakh at 8%:
| Years | Simple interest | Compound (yearly) | Difference |
|---|---|---|---|
| 1 | ₹8,000 | ₹8,000 | ₹0 |
| 3 | ₹24,000 | ₹25,971 | ₹1,971 |
| 5 | ₹40,000 | ₹46,933 | ₹6,933 |
| 10 | ₹80,000 | ₹1,15,892 | ₹35,892 |
| 20 | ₹1,60,000 | ₹3,66,096 | ₹2,06,096 |
The compound interest calculator goes further, with quarterly, monthly and daily compounding.
Deposits that behave like simple interest
If interest is paid into your bank account instead of being added to the deposit, the principal never grows, so the deposit earns simple interest. The Post Office Monthly Income Scheme works this way. For the October–December 2026 quarter it pays 7.4% a year, credited every month. Bank FDs on a monthly or quarterly payout do the same. If you don't need the income, the cumulative option of a fixed deposit earns more, and the inflation calculator shows how much of either return is left once prices rise.
Frequently asked questions
Does the date option count leap years?
Yes. It counts the actual days between the two dates and divides by 365. From 15 November 2027 to 15 November 2028 is 366 days because of 29 February 2028, so ₹1 lakh at 8% earns ₹8,021.92 instead of ₹8,000.
Why is my bank's figure slightly different?
Banks may treat a leap year as 366 days, round interest to the rupee at each payout, or deduct TDS before paying you. Any of these can move the amount by a few rupees. If the deposit adds interest to the balance, it compounds, and the FD calculator will be closer.
As a borrower, is simple interest the better deal?
At the same rate, yes, because you never pay interest on unpaid interest. Watch for loans described as "flat rate", though. They charge simple interest on the full original amount for the whole term, even after most of it is repaid, which costs far more than a reducing-balance loan at the same headline rate.