Simple Interest Formula
SI Formula
Example: ₹1,00,000 at 8% for 5 years → SI = (1,00,000 × 8 × 5) / 100 = ₹40,000
Compound Interest Formula
CI Formula
Where: P = principal, r = annual rate, n = compounds per year, t = years
Example: ₹1,00,000 at 8% for 5 years, quarterly → A = 1,00,000 × (1 + 0.08/4)20 = ₹1,48,595
Simple vs Compound Interest Comparison
| Years | Simple Interest | Compound Interest (Quarterly) |
|---|---|---|
| 1 | ₹8,000 | ₹8,243 |
| 5 | ₹40,000 | ₹48,595 |
| 10 | ₹80,000 | ₹1,20,802 |
| 20 | ₹1,60,000 | ₹3,87,538 |
How to Use This Interest Calculator
- Select Simple Interest or Compound Interest.
- Enter principal amount.
- Enter annual interest rate.
- Enter time in years.
- For compound interest, choose compounding frequency.
- See interest earned and total amount instantly.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on principal. Compound interest is calculated on principal plus accumulated interest, so it grows faster.
What is the formula for compound interest?
A = P(1 + r/n)^(nt), where P = principal, r = rate, n = compounds/year, t = years.
Which compounding frequency gives the highest return?
Daily compounding gives the highest return, followed by monthly, quarterly, half-yearly, and yearly.
What is the formula for simple interest?
SI = (P × R × T) / 100.
Can I use this calculator for FD or RD?
Yes. For FD, use compound interest with quarterly compounding. For RD, use our dedicated FD & RD Calculator.