Simple Interest Calculator
Quickly calculate interest, future value, and total maturity amount based on the linear interest formula.
Results
Total Simple Interest (I)
₹0
Final Maturity Amount (A)
₹0
Total Loan Principal (P)
₹0
Simple Interest vs. Compound Interest
The **Simple Interest Calculator** applies interest only to the original **Principal Amount ($P$)**. This is the easiest form of interest to calculate and is typically used for short-term retail loans or inter-company debt. It contrasts sharply with **Compound Interest**, where interest is applied to both the principal and previously earned interest.
The Simple Interest Formula (The PIR Method)
Simple Interest ($I$) is calculated by multiplying the three core factors: $$I = P \cdot R \cdot T$$ $$\text{Maturity Amount} (A) = P + I$$ Where: $\text{P}$ = Principal, $\text{R}$ = Annual Rate (as decimal), $\text{T}$ = Time in Years.
Frequently Asked Questions (FAQ)
Where is simple interest still used today?
Simple interest is common in commercial loans that do not involve regular periodic payments (like saving accounts with simple interest only), installment loans where the interest is calculated upfront, and basic legal or settlement agreements.