About the Interest Calculator
An interest calculator shows how much interest a sum of money earns (or costs) over time, both as simple interest and as compound interest. Enter the principal, annual rate, time in years and how often interest compounds.
How Interest Calculator works
Simple interest: I = P · r · t.
Compound interest: Balance = P · (1 + r/n)n·t, where n = times compounded per year.
Example: ,000 at 5% for 10 years → simple interest ,000; compounded monthly ≈ ,470.
Common uses
- Compare simple vs compound interest
- Estimate savings or deposit growth
- See the effect of compounding frequency
- Work out interest on a loan or bond
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus previously earned interest, so it grows faster.
What does compounding frequency change?
More frequent compounding (monthly or daily vs annually) earns slightly more interest for the same rate.