Investing Basics
Beginner
Simple Interest
💡 In plain English: Interest calculated only on the original amount you deposited — no snowball effect.
Definition
Interest earned only on the principal amount, not on previously earned interest.
📌 Real-World Example
₹1,00,000 at 10% simple interest earns ₹10,000 every year. After 5 years: ₹1,50,000 (vs ₹1,61,051 with compound interest).
🔢 Formula
SI = P × R × T / 100
Try it yourself
Use the EMI Calculator to see this concept with your own numbers.
Related Terms
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