Interest Calculator
Calculate simple or compound interest on a principal amount over time.
Simple vs compound interest
Simple interest is calculated only on the original principal every period. Compound interest is calculated on the principal plus any interest already earned, so it grows faster the longer money stays invested — more frequent compounding (monthly vs annually) grows it slightly faster still, at the same stated rate.
About the Interest Calculator
The Interest Calculator calculates simple or compound interest from a principal, annual rate and time. Choose compounding annually, semi-annually, quarterly or monthly and see the interest earned and final amount.
Simple interest is calculated only on the original principal: principal times rate times time. Compound interest is calculated on the principal plus previously earned interest, using principal times (1 plus rate divided by n) to the power of n times years. More frequent compounding gives a slightly higher return, and over long periods compounding makes a large difference.
How to use it
- Choose simple or compound interest.
- Enter principal, annual rate and years.
- Select the compounding frequency if compound.
- Read the interest and final amount.
Tips and good to know
- Bank deposits usually compound; some loans and bonds use simple interest.
- Compare the effective annual yield when comparing products.
- Use the same time unit as the rate.
Frequently asked questions
Which is better for savers?
Compound interest, because you earn interest on interest.
How do I enter months?
Convert to years, for example 6 months is 0.5.
Does it include tax?
No.