Calculate Simple Interest, Compound Interest (with annual, semi-annual, quarterly, or monthly compounding), and EMI for loans. Includes year-by-year breakdown and full loan summary.
SI = P × R × T ÷ 100Interest is always computed on the original principal only.
A = P × (1 + R/n)^(n×T)CI = A − P. Interest earns interest each period.
EMI = P×r×(1+r)^N ÷ ((1+r)^N−1)Equal monthly payment covering principal + interest.
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Based on | Original principal only | Principal + accumulated interest |
| Growth type | Linear | Exponential |
| Interest amount | Same every period | Increases each period |
| Best for | Short-term loans | Long-term investments |
| Example (₹1L, 10%, 5yr) | ₹50,000 interest | ₹61,051 interest (annual) |
Simple Interest (SI) = (Principal × Rate × Time) ÷ 100. For example, if Principal = ₹1,00,000, Rate = 8% per annum, and Time = 3 years, then SI = (1,00,000 × 8 × 3) ÷ 100 = ₹24,000. Total Amount = Principal + SI = ₹1,24,000.
Compound Interest uses: A = P × (1 + R/n)^(n×T), where P = Principal, R = Annual Rate (in decimal), n = Compounding frequency per year, T = Time in years. CI = A − P. For monthly compounding, n = 12. For annual, n = 1.
In Simple Interest, interest is calculated only on the principal amount each period. In Compound Interest, interest is calculated on the principal plus all previously earned interest (interest on interest), causing it to grow exponentially. Compound Interest always yields a higher return over the same period.
EMI = P × r × (1 + r)^N ÷ ((1 + r)^N − 1), where P = Loan Amount, r = Monthly interest rate (Annual Rate ÷ 12 ÷ 100), N = Total number of months. For a ₹5,00,000 loan at 10.5% for 5 years: r = 10.5/(12×100) = 0.00875, N = 60. EMI ≈ ₹10,747.
Compounding frequency is how often interest is calculated and added to the principal per year. Annual = once a year, Semi-Annual = twice, Quarterly = 4 times, Monthly = 12 times. More frequent compounding results in slightly higher interest earned, especially over long durations.
Monthly compounding is better for savings/investments as it results in slightly more interest earned due to more frequent reinvestment. For loans, monthly compounding means you pay slightly more interest. The difference becomes significant over longer durations and higher principal amounts.