Simple Interest Calculator

Simple Interest Calculator

Find the earnings accrued in a simple interest investment model.
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Identifying the right investment for your needs requires investors to evaluate many different factors, such as investment goals, feasible term period, premium amount, and interest. Understanding how much you can earn on investing is a key metric in knowing which investment avenue can help you meet certain goals. You can do so by calculating the simple interest on your premiums. 

What is Simple Interest (SI)? 

To understand what simple interest is, you must first understand the term interest. Interest refers to the cost of borrowing money. In any investment scheme, the company essentially borrows money from investors to pool into assets (or their growth, depending on the scheme itself). In return, it pays investors an annual interest, allowing them to grow their wealth by the end of the investment term. 

Simple interest is a method of calculating the amount of interest you will earn on your investment. For instance, let’s say Riya has invested Rs 1,00,000 in an FD for 10 years. The rate of interest offered to her by her bank is 6.5% per annum. Her estimated interest on this would be Rs 90,000, which means that at the end of 10 years, her FD will grow to 1,90,000.

Why should you calculate simple interest?

You must calculate simple interest because:

  1. It will help you understand how much you stand to earn at the end of the investment period
  2. You can plan your financial goals based on the interest, or you can increase your premium if you feel your specific goals are not being met.
  3. You can use this information to nullify debt in the future, pay back loans quicker (high interest can often be an incentive to pay loans quickly), and plan your goals based on future earnings.
  4. Using a simple interest calculator can help you determine the value of money currently. 
  5. You can use a simple interest calculator to ascertain whether your investment is inflation-proof. 

How to calculate simple interest?

Calculating the annual amount

When calculating the annual interest you can earn on an investment, the following formula must be applied:

A = P(1+rt) wherein.

A = amount accumulated (which means your investment amount + interest)

P = Principal amount 

R = Rate of interest represented in decimals (r/100)

T = Term period

Calculating the interest on loans or investments

When calculating the interest on loans or investments, the formula would be

SI = P x R X T / 100 wherein,

P = Principal amount 

R = Rate of interest represented in decimals (r/100)

T = Term period

When is simple interest calculated?

Simple interest is typically calculated in the following scenarios:

  1. If you have borrowed money: This helps you understand the sum of the interest as well as borrowed amount so that you know how much to pay back.
  2. If you have lent money: Conversely, this helps you understand how much your borrower needs to pay you back as per the determined interest and period. 
  3. If you have invested money: This helps you plan your financial goals and milestones based on the amount you stand to earn at the end of the investment period. 

How to use Hubble Money’s Simple Interest Calculator?

To use Hubble Money’s Simple Interest Calculator, you must:

  1. Enter the investment amount in the correct field
  2. Enter the interest rate offered to you by your bank
  3. Enter the term period of your investment
  4. Click the ‘Calculate’ button.
  5. The interest, as well as the accumulated amount, will be displayed. 

Did you know that Hubble Money gives you 10% cash back on every deposit you make? For example, if you create your savings account for a Myntra purchase, and deposit Rs 1,000 every month for 3 months, you will have a total of R 3,300. Use our calculator today to start planning for short-term purchases! 


  1. Is the Hubble Money SI calculator free to use?

Yes, this tool is free to use. 

  1. What kinds of investments can an SI calculator help me plan for?

Typically, you should use these for investments that do not offer compound interest. So, FDs, RDs, and other straightforward savings schemes are ideal. 

  1. Can the interest rate change with time?

No, most banks offer a fixed rate of interest.

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