How this calculation works
Calculate interest charged or earned only on the original principal. Unlike compound interest, earlier interest never joins the amount on which the next period’s interest is calculated. This suits a stated simple-interest agreement; it does not reproduce a reducing-balance loan with monthly repayments.
Worked example
This example uses illustrative inputs. Your current result is shown above.
For ₹1,00,000 at 8% a year for 3 years, interest = ₹1,00,000 × 0.08 × 3 = ₹24,000. The final principal plus interest is ₹1,24,000.
Assumptions and limits
- Principal is unchanged throughout the term.
- The annual rate is constant, with no compounding, repayments, fees or tax.
- The years input is a numeric duration, not a bank-specific day-count convention.
Questions people ask
Can I enter six months?
Yes. Enter 0.5 years. This treats six months as half a year rather than counting the actual days between two dates.
Can this calculate the total cost of an EMI loan?
Not accurately. EMI interest normally depends on the outstanding balance after each payment; use the loan calculator for that repayment schedule.