📊 Simple Interest Calculator
Calculate simple interest with precision across Years, Months, or Days. Automatic leap year detection ensures maximum accuracy.
Investment Details
Enter your investment details to see interest accrual and maturity amount
❓ Frequently Asked Questions
What is Simple Interest?▼
Simple Interest (SI) is interest calculated only on the principal amount, without compounding. Unlike compound interest, SI doesn't earn interest on previously earned interest. Formula: SI = (P × R × T) / 100, where P is principal, R is annual rate (%), and T is time period.
What are the three tenure types and when to use them?▼
Years: Most common for long-term investments and traditional loans (mortgages, vehicle loans).
Months: Used for medium-term arrangements like personal loans, peer-to-peer lending, or short-term bonds.
Days: Essential for banks calculating overdraft charges, short-term credit lines, bond accruals, or any daily interest scenario requiring precision.
How are the formulas adjusted for different time periods?▼
Years: SI = (P × R × Years) / 100.
Months: SI = (P × R × Months) / 1200. We divide by 1200 because 1200 = 100 × 12.
Days: SI = (P × R × Days) / (100 × DaysInYear). This calculator automatically detects leap years, using 366 days during leap years and 365 days otherwise for maximum accuracy.
What is daily interest accrual and why is it useful?▼
Daily accrual shows how much interest accumulates per day: (P × R) / DaysInYear. For users calculating short-term commercial returns or friendly loans, this provides practical insight into daily interest growth. For example, on ₹1 lakh at 8% p.a., daily accrual is roughly ₹21.92 per day, making it easy to estimate interest for any number of days.
When is Simple Interest used vs. Compound Interest?▼
Simple Interest: Used for most personal loans, auto loans, home loans, and government savings schemes like Sukanya Samriddhi.
Compound Interest: Used for Fixed Deposits, savings accounts, mutual funds, and investments where interest is reinvested. Over the same period, CI yields significantly more interest than SI, so always verify which method your financial institution uses.
How does leap year affect daily interest calculations?▼
During leap years (366 days instead of 365), interest accrual is slightly lower since the same annual rate is spread across one additional day. This calculator automatically detects leap years when you use the Days tenure type, ensuring your daily interest calculations are accurate down to the penny. This is critical for banks and financial institutions that must maintain regulatory precision.