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Interest Calculator
Calculate either simple or compound interest on a principal and see how it grows over time.
Interest is the price of money over time, and it comes in two flavours. Simple interest is charged only on the original amount; compound interest is charged on the amount plus interest already earned. This calculator computes either, so the difference is visible in numbers.
How to use this calculator
- Enter the principal amount.
- Add the yearly interest rate and the time period.
- Choose simple or compound interest (and compounding frequency for compound).
- Press calculate to see the interest earned and the total value.
When each type applies
Simple interest appears on some short-term loans and classroom problems. Compound interest runs most real savings accounts, deposits and debts — including credit cards, which is why balances grow so stubbornly. Always check which type a product uses before comparing its rate.
Frequently asked questions
What is the simple interest formula?
I = P × r × t: principal times rate (as a decimal) times time in years.
Why does compounding frequency matter?
Interest added more often starts earning its own interest sooner. Daily compounding beats yearly at the same rate, though at modest rates the gap is small.
Which is better for me, simple or compound?
As a saver, compound works for you; as a borrower, simple would be kinder. The product decides — your job is knowing which one you are looking at.