साधारण ब्याज कैलकुलेटर — सूत्र

How Simple Interest Works

Simple interest charges you a flat percentage on the original amount only. Borrow $1,000 at 5% simple interest for 3 years and you owe $150 in interest, period. The interest doesn't compound. This makes simple interest easy to calculate and predict, which is why some personal loans, auto loans, and short-term lending still use it.

The Formula

Interest = Principal x Rate x Time

Principal = Amount borrowed or invested

Rate = Annual interest rate (as a decimal, so 5% = 0.05)

Time = Time in years

Total Amount = Principal + Interest

Simple vs. Compound Interest

The difference matters. $10,000 at 6% simple interest for 10 years earns $6,000 in interest. The same amount at 6% compound interest (annually) earns $7,908. Over short periods the gap is small. Over decades it gets large. Credit cards, savings accounts, and most investments use compound interest. Simple interest shows up in some car loans, personal loans, and bonds.

When to Use This

Calculating interest on short-term loans, estimating bond yields, or understanding the interest portion of a flat-rate personal loan. Also useful as a quick estimate when compound interest would give a similar result (short time periods at low rates).

Common Mistakes

Applying simple interest math to a credit card balance. Credit cards use compound interest, usually daily. Simple interest would significantly understate what you owe.

Forgetting to convert the rate to a decimal. 5% in the formula is 0.05, not 5.

Confusing time units. If the rate is annual but the time is in months, divide months by 12 first.