Interest Calculator
Adjust the inputs below. Results update as you type.
How it works
Simple interest: I = P × r × t. Total = P + I. Compound interest: A = P × (1 + r/n)^(nt), where n is compounding periods per year. Daily compounding at 5% APR yields ~5.13% APY. Savings accounts quote APY; loans quote APR—compare like-for-like. Rule of 72: years to double ≈ 72 / annual rate%.
Input guidance
- Principal should be the amount earning or accruing interest.
- Clarify whether the rate is simple or compound for your product.
- Match the time unit to the rate basis (days vs years).
The formula
Simple interest is I = P · r · t. Compound interest is A = P · (1 + r/n)^(n·t), where P is principal, r the annual rate, t the time in years, and n the compounding periods per year.
Worked example
$5,000 at 4% for 3 years: simple interest = 5000 × 0.04 × 3 = $600. Compounded monthly, the balance grows to about $5,637, or $637 of interest.
More examples to test
- $10,000 at 5% simple interest for 2 years: interest earned.
- Same principal at 5% compounded monthly for 2 years: compare totals.
How to interpret results
Simple and compound interest answer different product questions. Match the mode to the account or loan type.
When this can be inaccurate
Fees, day-count conventions, and rate changes can diverge from textbook formulas.
Change history
- June 2026: Quality-reviewed for publication with formula checks and explanatory copy updates.
Site-wide corrections also appear on the corrections log.
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Frequently asked questions
What is the difference between simple and compound interest?+
Simple interest is charged only on the original principal. Compound interest is charged on the principal plus previously accrued interest, so it grows faster over time.
How does compounding frequency matter?+
More frequent compounding (daily vs. annually) produces slightly more interest because earnings start earning sooner. The effect grows with higher rates and longer terms.
Where do I see compound interest?+
Savings accounts, CDs, and investments compound in your favor; credit cards and many loans compound against you.
How should I use this result?+
Treat it as a planning estimate. Compare at least two realistic scenarios, then confirm with statements, quotes, or a qualified professional before acting.
How often should I refresh assumptions?+
Refresh whenever rates, income, costs, or policy limits change materially, and before making irreversible commitments.