Interest Calculator: Simple & Compound Interest Tool

Calculate how much interest you will earn on your savings or pay on a loan. Easily compare simple vs compound interest Growth.

Input Parameters

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Ready to Calculate

Fill in the required parameters on the left and click calculate to see the detailed results and analysis.

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Growing Your Wealth: Understanding Interest Calculations

Whether you are putting money into a high-yield savings account or taking out a small personal loan, Interest is the fundamental engine of the financial world. It is the cost of borrowing money or the reward for lending it. Our Interest Calculator is a versatile tool that helps you project how your money will grow over time or how much a debt will cost you in total.

Simple vs. Compound Interest: The Crucial Difference

The way interest is calculated can have a massive impact on your final balance, especially over long periods:

  • 1Simple Interest: Interest is calculated only on the initial principal. It grows at a steady, linear rate.
    • - Formula: Principal × Rate × Time.
  • 2Compound Interest: Interest is calculated on the principal plus any interest that has already been earned. Albert Einstein reportedly called it "the eighth wonder of the world."
    • - Formula: Principal × (1 + Rate/n)^(nt).

    The Power of Compounding Frequency

    The more often interest is added back to your principal (compounded), the faster your money grows. A bank that compounds interest Monthly will yield slightly more than one that compounds Annually, even if they have the same stated interest rate. Our calculator allows you to adjust this frequency to see the exact numerical difference.

    Why Use an Interest Calculator?

  • •Retirement Planning: See how small monthly contributions can turn into a large nest egg over 20 or 30 years.
  • •Loan Comparison: Calculate the total interest you'll pay on a loan to see if the monthly payment is truly worth it.
  • •Emergency Fund Growth: Project how long it will take to reach your savings goals with different interest rates.
  • •Educational Tool: An excellent way for students to visualize the time value of money (TVM).

    • How to Use This Calculator

    Input the "Principal Amount" (your starting money). Enter the "Annual Interest Rate" and the "Time Period" in years. Select whether you want to calculate Simple or Compound interest. If you choose compound, select the frequency (Monthly, Annually, etc.). The calculator will provide the Total Accumulated Amount and the Total Interest Earned/Paid instantly.

    ? Frequently Asked Questions

    Q What is APR vs. APY?

    APR (Annual Percentage Rate) is the raw interest rate. APY (Annual Percentage Yield) includes the impact of compounding. APY is always higher than or equal to APR.

    Q When should I use Simple Interest?

    Simple interest is typically used for short-term loans, some types of bonds, and specific consumer loans like auto financing (though this varies).

    Q How does inflation affect my interest?

    Your 'Real Interest Rate' is your earned interest minus the inflation rate. If you earn 5% interest but inflation is 3%, your buying power only grows by 2%.

    Q Does this calculator include taxes?

    No. Interest earned is often taxable income. Depending on your country and account type (like an IRA or ISA), you may owe a percentage of your earnings to the government.

    Q Why is compound interest so powerful?

    Because you start 'earning interest on your interest.' Over time, the growth becomes exponential rather than linear, leading to significant accumulation in later years.