How to use the interest calculator
- Enter the principal – the amount borrowed or invested.
- Enter the yearly rate of interest.
- Enter the time in years and months.
- Pick how often interest is compounded for the compound interest result. Most school problems use yearly compounding; bank FDs usually compound quarterly.
You'll see the simple interest (SI), the compound interest (CI), the total amount for each, the difference between them, and a year-by-year table.
Simple interest formula
SI = P × R × T ÷ 100 and Amount = P + SI
Example: ₹10,000 at 8% for 3 years. SI = 10,000 × 8 × 3 ÷ 100 = ₹2,400, so the amount is ₹12,400. Simple interest is earned only on the original principal, so it's the same ₹800 every year.
Compound interest formula
Amount = P × (1 + R ÷ (100 × n))n × T and CI = Amount − P, where n is the number of times interest is compounded per year.
Example: ₹10,000 at 8% for 3 years, compounded yearly: 10,000 × 1.08³ = ₹12,597.12, so CI = ₹2,597.12. With quarterly compounding it becomes ₹12,682.42, and with monthly compounding ₹12,702.37 – the more often interest is added, the more you earn.
Shortcut for exam questions
Many competitive exams ask for the difference between CI and SI. With yearly compounding:
- For 2 years:
CI − SI = P × (R ÷ 100)². For ₹10,000 at 8%: 10,000 × 0.08² = ₹64. - For 3 years:
CI − SI = P × (R ÷ 100)² × (3 + R ÷ 100). For ₹10,000 at 8%: ₹197.12.
Use the calculator to check your answers when practising. Our guide on simple vs compound interest explains these with more examples.
Frequently asked questions
What is the formula for simple interest?
SI = P × R × T ÷ 100, where P is the principal, R the yearly rate and T the time in years.
What is the formula for compound interest?
Amount = P × (1 + R ÷ 100)T for yearly compounding, and CI = Amount − P. For more frequent compounding, divide the rate and multiply the time by the number of periods per year.
Why is compound interest more than simple interest?
In compound interest, the interest earned each period is added to the principal and then earns interest itself. Simple interest is always calculated on the original principal only.
How do I enter time in months?
Use the months box. For example, 2 years 6 months is entered as 2 years and 6 months, which the calculator treats as 2.5 years.