Interest Calculator

Calculate simple or compound interest and total returns.

What Does the Interest Calculator Do?

This calculator computes both simple and compound interest. Enter a principal, annual rate and time; for compound mode, also pick how often interest compounds (yearly, half-yearly, quarterly, monthly or daily). You get the final amount, total interest earned, overall growth percentage, and an expandable year-by-year table showing the balance snowball in action.

Simple interest grows linearly — interest is always calculated on the original principal. Compound interest earns interest on interest, which is why the same rate produces dramatically more over long periods.

How to Calculate Interest

  1. Choose Compound or Simple with the tabs.
  2. Enter principal, annual rate and time in years.
  3. For compound: select the compounding frequency (monthly is typical for savings accounts).
  4. Click Calculate and explore the year-by-year growth table.

Seeing Compounding's Power

  • 10,000 at 7% for 30 years: simple interest yields 31,000 total — compounding monthly yields about 81,000. Same rate, 2.6× the result.
  • The rule of 72 — divide 72 by the rate to estimate doubling time: at 8%, money doubles roughly every 9 years.
  • Frequency matters less than you'd think — moving from yearly to monthly compounding helps noticeably; monthly to daily adds only a sliver.
  • Time is the main ingredient — starting ten years earlier usually beats finding a slightly higher rate.

Frequently Asked Questions

What formulas does the calculator use?

Simple: A = P(1 + rt). Compound: A = P(1 + r/n)^(nt), where r is the annual rate, t years, and n compounding periods per year. Both are the standard textbook (and bank) formulas.

When does simple interest actually apply?

Short-term loans, some bonds, car loans in certain markets and informal lending often use simple interest. Savings accounts, credit cards and mortgages virtually always compound.

Which compounding frequency should I pick?

Match your product: most savings accounts compound monthly, many bonds half-yearly, some accounts daily. If unsure, monthly is the most common and a good default.

Does the calculator account for regular deposits?

No — it models a single lump sum. For monthly contributions, a future-value-of-annuity calculation is needed; you can approximate by running the calculator per deposit year and summing.