Simple Interest Calculator

A Simple Interest Calculator helps you calculate the interest earned or payable on a principal amount over a fixed period at a fixed rate of interest. Simple interest is one of the easiest and most transparent ways to calculate interest and is commonly used for short-term loans and savings. With Paytm's Simple Interest Calculator, you can instantly calculate interest without manual formulas or complex calculations.

What is Simple Interest?

Simple interest is a method of calculating interest where the interest is calculated only on the original principal amount for the entire duration. Unlike compound interest, simple interest does not earn interest on previously accumulated interest. As a result, the interest amount remains the same for every period, making it easy to understand and predict.

Simple Interest Formula

The formula used to calculate simple interest is:

Simple Interest (SI) = (P × R × T) ÷ 100

Where:

• P = Principal amount
• R = Annual rate of interest (in %)
• T = Time period (in years)

Example of Simple Interest Calculation

Let's understand this with an example:

• Principal amount: ₹50,000
• Interest rate: 6% per annum
• Time period: 2 years

Simple Interest = (50,000 × 6 × 2) ÷ 100 = ₹6,000

So, the total interest payable after 2 years will be ₹6,000, and the total repayment amount will be ₹56,000.

What is a Simple Interest Calculator?

A Simple Interest Calculator is an online tool that automatically calculates the interest amount using the simple interest formula. It helps borrowers, lenders, and investors quickly estimate interest for loans, savings, or short-term investments without doing manual calculations.

How to Use Paytm Simple Interest Calculator?

Using Paytm's Simple Interest Calculator is quick and easy:

• Enter the principal amount
• Enter the annual rate of interest
• Enter the time period
• Click on Calculate

The calculator will instantly show the simple interest amount based on your inputs.

Advantages of Simple Interest

Simple interest offers several benefits:

• Easy to understand and calculate
• Predictable interest amount throughout the tenure
• Suitable for short-term loans and savings
• Transparent for both borrowers and lenders
• Ideal for low-risk and fixed-tenure transactions

Why Use Paytm Simple Interest Calculator?

• Instant and accurate results
• No manual calculations required
• Easy-to-use interface
• Helps compare different interest rates and tenures
• Free and accessible on web and app

Wrapping It Up

Simple interest is one of the most straightforward ways to calculate interest on loans and savings. If you want quick, clear, and accurate calculations, Paytm's Simple Interest Calculator makes the process effortless and reliable.