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About this tool
Simple interest is calculated on the starting principal for the entire period. It is commonly used in classroom problems and some short-term agreements.
How to use it
- Enter the principal amount.
- Enter the annual interest rate and time.
- Choose years or months, then calculate.
Simple interest formula
Interest = principal × annual rate × time in years ÷ 100
Final amount = principal + interest
Worked example
Example: PKR 100,000 at 10% simple interest for 2 years earns PKR 20,000, giving a final amount of PKR 120,000.
Good to know
Simple interest does not add previous interest to the principal. Use the compound interest calculator when interest is reinvested or capitalised.
Need more explanation or examples?
Compare interest calculations with loan EMI →Frequently asked questions
Can I enter time in months?
Yes. The calculator converts months into a fraction of a year.
Does it include fees or tax?
No.
Can the interest rate be zero?
Yes.
Tool logic and explanatory wording reviewed on July 19, 2026.