Simple Interest Calculator

Simple interest never adds interest to the principal. ₹1 lakh at 7% for 3 years is ₹21,000 interest and ₹1,21,000 payable. Moneylenders and some local “hand loans” still talk this way; banks usually compound. This page is the NCERT identity, useful when a relative in Kanpur says “7% simple for three years.”

The cash-flow question

The compound-interest tool on IndiaKit would show a higher pile at the same 7% and 3 years. Keeping a simple-interest page stops that confusion and gives chit-fund conversations a number. It is not an RBI-regulated product quote.

The maths on this page

Interest = P × R × T / 100. Amount = P + interest. Defaults: ₹1,00,000, 7%, 3 years → ₹21,000 interest, ₹1,21,000 payable.

If someone says 7% a month simple, that is 84% a year — type 84 and 1 year, or 7 and 1/12 of a year only if you really mean a month (this form uses years).

Usurious rates may be illegal under state money-lending laws. This calculator will still multiply them; that does not make the contract lawful.

₹1 lakh, 7% simple, three years in Kanpur

An uncle in Kanpur offers ₹1,00,000 at 7% simple for three years. IndiaKit shows ₹21,000 interest. A bank FD at 7% compound for three years would pay a bit more; a 7% per month private loan would be a different, dangerous animal.

What a bank still has to confirm

No compounding, no amortization, no TDS. Not a recommendation to take a private loan. Compare with the compound tool.

Common questions

Why is this lower than the compound calculator at 7% for 3 years?

Because compound interest earns interest on interest. Simple does not. At 7% and 3 years the gap is visible but modest; at 10 years it is not modest.

Can T be in months?

The field is years. For 6 months type 0.5.

Is hand-loan interest deductible on my ITR?

Usually not as a salaried person. Business interest deductibility is a CA topic. This page only multiplies.